Poca, WV
Xxxxxx County
================================================================================
A SECOND PRIORITY CREDIT LINE DEED OF TRUST, SECURITY
AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS
From
RITE AID OF WEST VIRGINIA, INC.
TO
XXXX X. XXXXXXX
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx (Xxxxxxxx Xxxxxx)
Xxxx Xxxxxxxx
an individual
as Trustee
for the benefit of
WILMINGTON TRUST COMPANY,
as SECOND PRIORITY COLLATERAL TRUSTEE FOR
THE BENEFIT OF THE SECOND PRIORITY DEBT PARTIES
as BENEFICIARY
Dated: June 27, 2001
Premises: West Virginia Distribution Xxxxxx
Xxxx Xxxxxx Xxxxxxxxxx Xxxx
Xxxx, XX
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
Representations, Warranties and Covenants
of Grantor
SECTION 1.01. Title ......................................................... 9
SECTION 1.02. Senior Loan Documents ......................................... 10
SECTION 1.03. Second Priority Debt Documents; Second Priority Subsidiary
Guarantee Agreement.......................................... 12
SECTION 1.04. Payment of Taxes, Liens and Charges ........................... 12
SECTION 1.05. Payment of Closing Costs ...................................... 13
SECTION 1.06. Plans; Alterations and Waste; Repairs ......................... 13
SECTION 1.07. Insurance ..................................................... 14
SECTION 1.08. Casualty; Condemnation/Eminent Domain ......................... 14
SECTION 1.09. Assignment of Leases and Rents ................................ 14
SECTION 1.10. Restrictions on Transfers and Encumbrances .................... 16
SECTION 1.11. Security Agreement ............................................ 16
SECTION 1.12. Filing and Recording .......................................... 17
SECTION 1.13. Further Assurances ............................................ 17
SECTION 1.14. Additions to Trust Property ................................... 18
SECTION 1.15. No Claims Against Trustee or Beneficiary ...................... 18
SECTION 1.16. Fixture Filing ................................................ 18
SECTION 1.17. Notice Regarding Special Flood Hazards ........................ 18
ARTICLE II
Default and Remedies
SECTION 2.01. Events of Default ............................................. 19
SECTION 2.02. Demand for Payment ............................................ 19
SECTION 2.03. Rights To Take Possession, Operate and Apply Revenues ......... 19
SECTION 2.04. Right To Cure Grantor's Failure to Perform .................... 21
SECTION 2.05. Right to a Receiver ........................................... 21
SECTION 2.06. Foreclosure and Sale .......................................... 21
SECTION 2.07. Other Remedies ................................................ 23
SECTION 2.08. Application of Sale Proceeds and Rents ........................ 23
SECTION 2.09. Grantor as Tenant Holding Over ................................ 24
SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws ......................................... 24
SECTION 2.11. Discontinuance of Proceedings ................................. 25
SECTION 2.12. Suits To Protect the Trust Property ........................... 25
SECTION 2.13. Filing Proofs of Claim ........................................ 25
SECTION 2.14. Possession by Beneficiary ..................................... 25
SECTION 2.15. Waiver ........................................................ 26
SECTION 2.16. Remedies Cumulative ........................................... 27
ARTICLE III
Miscellaneous
SECTION 3.01. Partial Invalidity ............................................ 27
SECTION 3.02. Notices ....................................................... 27
SECTION 3.03. Successors and Assigns ........................................ 27
SECTION 3.04. Satisfaction and Cancelation. ................................. 28
SECTION 3.05. Definitions ................................................... 28
SECTION 3.06. Rules of Interpretation ....................................... 29
SECTION 3.07. Multisite Real Estate Transaction ............................. 29
SECTION 3.08. Subordination; Intercreditor Agreement ........................ 30
SECTION 3.09. Collateral Trust and Intercreditor Agreement .................. 30
SECTION 3.10. Amendments in Writing ......................................... 30
ARTICLE IV
Particular Provisions
SECTION 4.01. Applicable Law; Certain Particular Provisions ................. 31
SECTION 4.02. Trustee's Powers and Liabilities .............................. 31
Exhibit A Description of Land
Exhibit B Premises Located in a Special Flood Hazard Area
Appendix A Local Law Provisions
Appendix B Definitions Annex
THIS SECOND PRIORITY CREDIT LINE DEED OF TRUST, SECURITY
AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS dated as of June 27,
2001 (this "Second Priority Deed of Trust"), by RITE AID OF WEST
VIRGINIA, INC., a West Virginia corporation, having an office at 00
Xxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxxxx 00000 (the "Grantor"), to
XXXX X. XXXXXXX, having an office at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxxx, as trustee ("Trustee")
for the benefit of WILMINGTON TRUST COMPANY, a Delaware banking
corporation, having an office at Xxxxxx Square North, 0000 Xxxxx
Xxxxxx Xx., Xxxxxxxxxx, XX 00000-0000 (the "Beneficiary") as Second
Priority Collateral Trustee for the benefit of the Second Priority
Debt Parties.
W I T N E S S E T H T H A T:
Capitalized terms used but not defined in this Second Priority Deed of
Trust have the meanings given to them in the Definitions Annex annexed hereto as
Appendix B.
Reference is made to (i) the Senior Credit Agreement dated as of June
__, 2001 (the "Senior Credit Agreement"), among Rite Aid Corporation, a
Delaware corporation (the "Borrower"), the banks from time to time party
thereto and Citicorp USA, Inc., as Senior Administrative Agent and Senior
Collateral Agent for the banks and (ii) the Collateral Trust and Intercreditor
Agreement dated as of the date hereof (the "Collateral Trust and Intercreditor
Agreement"), among Rite Aid Corporation, certain subsidiaries of Rite Aid
Corporation, Wilmington Trust Company as Second Priority Collateral Trustee,
Citicorp USA, Inc., as Senior Collateral Agent, and each Second Priority
Representative, as amended from time to time.
Reference is made to the Senior Deed of Trust dated as of June __, 2001
(the "Senior Deed of Trust"), with Citicorp USA, Inc., as Senior Collateral
Agent pursuant to which the Grantor has granted to the Senior Collateral Agent a
first mortgage lien on the property described herein. The lien of this Second
Priority Deed of Trust is intended by the Grantor and the Trustee or Beneficiary
to be junior and subordinate to the Lien of the Senior Deed of Trust.
Grantor is a wholly owned subsidiary of the Borrower and will derive
substantial benefit from the making of the Second Priority Debt Documents. In
order to induce the Second Priority Debt Parties, among other things, amend and
5
extend the Second Priority Debt Documents, the Grantor has agreed to (i)
guarantee the due and punctual payment of the Second Priority Debt Obligations
of the Borrower under the Second Priority Debt Documents pursuant to the second
priority subsidiary guarantee agreement dated as of even date herewith (the
"Second Priority Subsidiary Guarantee Agreement") made by Grantor and certain
other Subsidiaries of Borrower (each, a "Subsidiary Guarantor") in favor of
Trustee in its capacity as Second Priority Collateral Trustee, and (ii) execute
and deliver this Second Priority Deed of Trust in the form hereof to secure all
of the Second Priority Debt Obligations guaranteed by Grantor pursuant to the
Second Priority Subsidiary Guarantee Agreement.
Pursuant to the requirements of the Second Priority Debt Documents and
the Second Priority Guarantee Agreement, the Grantor therefore grants this Deed
of Trust to create a lien on and a security interest in the Trust Property (as
defined herein) to secure the payment and performance of the Second Priority
Debt Obligations. The Second Priority Debt Documents also require the granting
by other Subsidiary Guarantors of mortgages, deeds of trust and deeds to secure
debt (the "Other Deeds of Trust") that create liens on and security interests
in certain parcels of real property (each, a "Trust Property") other than the
Trust Property to secure the payment and performance of the Second Priority Debt
Obligations.
Granting Clauses
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and in order to
secure the due and punctual payment and performance of the Second Priority Debt
Obligations for the benefit of the Second Priority Debt Parties, Grantor hereby
grants, conveys, mortgages, assigns and pledges to the Trustee and/or
Beneficiary and its successors and assigns forever, a security interest in, all
the following described property (the "Trust Property") whether now owned or
held or hereafter acquired:
(1) the land more particularly described on Exhibit A hereto (the
"Land"), together with all rights appurtenant thereto which may, by
their terms or as a matter of law, be conveyed or assigned along with
the Land, including the easements over certain other adjoining land
granted by any easement agreements, covenant or restrictive agreements
and all air rights, mineral rights, water rights, oil and gas rights
and development rights, if any, relating thereto, and also together
6
with all of the other easements, rights, privileges, interests,
hereditaments and appurtenances thereunto belonging or in any way
appertaining and all of the estate, right, title, interest, claim or
demand whatsoever of Grantor therein and in the streets and ways
adjacent thereto, either in law or in equity, in possession or
expectancy, now or hereafter acquired (the "Premises");
(2) all buildings, improvements, structures, paving, parking
areas, walkways and landscaping now or hereafter erected or located
upon the Land, and all fixtures of every kind and type affixed to the
Premises or attached to or forming part of any structures, buildings or
improvements and replacements thereof now or hereafter erected or
located upon the Land (the "Improvements");
(3) all apparatus, appliances, building materials, equipment,
fittings, machinery and other articles of tangible personal property of
every kind and nature, and replacements thereof, owned by Grantor and
now or at any time hereafter affixed to the Improvements or the
Premises, including all pumps, tanks, machinery, apparatus equipment,
lifts (including fire sprinklers and alarm systems, fire prevention or
control systems, cleaning rigs, air conditioning, heating, boilers,
refrigerating, electronic monitoring, water, loading, unloading,
lighting, power, sanitation, waste removal, communications, partitions,
lighting fixtures, freezers, refrigerators, walk-in coolers, signs
(indoor and outdoor), and all other items of tangible personal property
of any kind affixed to the Improvements or the Premises, it being
understood that the enumeration of any specific articles of property
shall in no way result in or be held to exclude any items of property
not specifically mentioned (the property referred to in this
subparagraph (3), (the "Fixtures");
(4) all general intangibles owned by Grantor and relating to
design, development, operation, management and use of the Premises or
the Improvements, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents
obtained from and all materials prepared for filing or filed with any
governmental agency in connection with the development, use, operation
or management of the Premises and Improvements, all construction,
7
service, engineering, consulting, leasing, architectural and other
similar contracts concerning the design, construction, management,
operation, occupancy and/or use of the Premises and Improvements, all
architectural drawings, plans, specifications, soil tests, feasibility
studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Premises and
Improvements, and all payment and performance bonds or warranties or
guarantees relating to the Premises or the Improvements, all to the
extent assignable (the "Permits, Plans and Warranties");
(5) all now or hereafter existing leases or licenses (under which
Grantor is landlord or licensor) and subleases (under which Grantor is
sublandlord), concession, management, mineral or other agreements of a
similar kind that permit the use or occupancy of the Premises or the
Improvements for any purpose in return for any payment, or the
extraction or taking of any gas, oil, water or other minerals from the
Premises in return for payment of any fee, rent or royalty
(collectively, "Leases"), and all agreements or contracts for the
sale or other disposition of all or any part of the Premises or the
Improvements, now or hereafter entered into by Grantor, together with
all charges, fees, income, issues, profits, receipts, rents, revenues
or royalties payable thereunder ("Rents");
(6) all real estate tax refunds and all proceeds of the
conversion, voluntary or involuntary, of any of the Trust Property into
cash or liquidated claims ("Proceeds"), including Proceeds of
insurance maintained by the Grantor and condemnation awards, any awards
that may become due by reason of the taking by eminent domain or any
transfer in lieu thereof of the whole or any part of the Premises or
Improvements or any rights appurtenant thereto, and any awards for
change of grade of streets, together with any and all moneys now or
hereafter on deposit for the payment of real estate taxes, assessments
or common area charges levied against the Trust Property, unearned
premiums on policies of fire and other insurance maintained by the
Grantor covering any interest in the Trust Property or required by the
Senior Credit Agreement; and
(7) all extensions, improvements, betterments, renewals,
substitutes and replacements of and all additions and appurtenances to,
the Land, the Premises, the Improvements, the Fixtures, the Permits,
Plans and Warranties and the Leases, hereinafter acquired by or
released to the Grantor or constructed, assembled or placed by the
Grantor on the Land, the Premises or the Improvements, and all
conversions of the security constituted thereby, immediately upon such
8
acquisition, release, construction, assembling, placement or
conversion, as the case may be, and in each such case, without any
further mortgage, deed of trust, conveyance, assignment or other act by
the Grantor, all of which shall become subject to the lien of this
Second Priority Deed of Trust as fully and completely, and with the
same effect, as though now owned by the Grantor and specifically
described herein.
TO HAVE AND TO HOLD the Trust Property unto the Trustee, its successors
and assigns, for the ratable benefit of the Second Priority Debt Parties,
forever, subject only to the Permitted Encumbrances (as hereinafter defined) and
to satisfaction and cancelation as provided in Section 3.04, IN TRUST
NEVERTHELESS, upon the terms and trust herein set forth for the benefit and
security of the Beneficiary.
ARTICLE I
Representations, Warranties and Covenants of Grantor
Grantor agrees, covenants, represents and/or warrants as follows:
SECTION 1.01. Title. (a) Grantor has good and marketable title to:
(i) an indefeasible fee estate in the Land and Improvements; and
(ii) all of the Fixtures;
subject only to (A) the Senior Deed of Trust, (B) liens, pledges, charges and
other encumbrances which are identified in Section 4.15(a) of the Senior Credit
Agreement and (C) minor defects in title that do not interfere with the ability
of Grantor or any other subsidiary of the Borrower to conduct its business as
presently conducted or to utilize the Trust Property for its intended purpose
(collectively, the "Permitted Encumbrances").
(b) There are no Leases affecting the Land or the Improvements except
as disclosed in the Second Priority Debt Documents.
(c) Grantor is not obligated under, and the Trust Property is not bound
by or subject to, any right, of first refusal, option or other contractual right
to sell, assign or otherwise dispose of any Trust Property or any interest
therein.
9
(d) The granting of this Second Priority Deed of Trust is within
Grantor's corporate powers and has been duly authorized by all necessary
corporate, and, if required, stockholder action. This Second Priority Deed of
Trust has been duly executed and delivered by Grantor and constitutes a legal,
valid and binding obligation of Grantor, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
(e) This Second Priority Deed of Trust, when duly recorded in the
appropriate public records and when financing statements are duly filed in the
appropriate public records, will create a valid, perfected and enforceable
first-priority lien upon and security interest in all the Trust Property subject
only to Permitted Encumbrances. As of the date hereof, there are no defenses or
offsets to this Second Priority Deed of Trust that will be asserted by Grantor
or its affiliates (or any third party defense or offset now known to Grantor or
its affiliates) or to any of the Second Priority Debt Obligations secured hereby
for so long as any portion of the Second Priority Debt Obligations remains
outstanding. Grantor will forever warrant and defend its title to the Trust
Property, the rights of Trustee and/or Beneficiary therein under this Second
Priority Deed of Trust and the validity and priority of the lien of this Second
Priority Deed of Trust against the claims of all persons and parties except
those having rights under Permitted Encumbrances, to the extent of those rights.
SECTION 1.02. Senior Loan Documents. The Grantor hereby covenants that
(i) the Grantor shall promptly pay when due and payable the principal, interest
and other charges mentioned in and made payable by the Senior Loan Documents;
(ii) the Grantor shall promptly perform and observe all of the terms, covenants
and conditions required to be performed and observed by the Grantor under the
Senior Loan Documents within the grace and cure periods provided in the Senior
Loan Documents; (iii) the Grantor shall notify the Trustee or Beneficiary (A)
promptly prior to the expiration of any applicable grace and cure period for
which provision is made in the Senior Loan Documents of any monetary default,
and (B) promptly after the expiration of any applicable grace and cure period
for which provision is made in the Senior Loan Documents of any non-monetary
default by the Grantor in the performance or observance of any of the terms,
10
covenants or conditions on the part of the Grantor to be performed or observed
under the Senior Loan Documents; and (iv) the Grantor shall (A) promptly notify
the Trustee or Beneficiary of the receipt by the Grantor of any notice from the
holders of the Senior Obligations asserting or claiming a default by the Grantor
in the performance or observance of any of the terms, covenants or conditions on
the part of the Grantor to be performed or observed under the Senior Loan
Documents, and (B) promptly cause a copy of each such notice to be delivered to
the Trustee or Beneficiary.
SECTION 1.03. Second Priority Debt Documents; Second Priority
Subsidiary Guarantee Agreement. (a) This Second Priority Deed of Trust is given
pursuant to the Second Priority Debt Documents and the Second Priority
Subsidiary Guarantee Agreement. Each and every term and provision of the Second
Priority Debt Documents and the Second Priority Subsidiary Guarantee Agreement
(excluding the governing law provisions thereof), including the rights,
remedies, obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties thereto shall be considered as if
a part of this Second Priority Deed of Trust.
(b) If Trustee or Beneficiary exercises any of its rights or remedies
under this Second Priority Deed of Trust, or if any actions or proceedings
(including any bankruptcy, insolvency or reorganization proceedings) are
commenced in which Trustee or Beneficiary is made a party and is obliged to
defend or uphold or enforce this Second Priority Deed of Trust or the rights of
Trustee or Beneficiary hereunder or the terms of any Lease, or if a condemnation
proceeding is instituted affecting the Trust Property, Grantor will pay all
reasonable sums, including reasonable attorneys' fees and disbursements,
incurred by Trustee or Beneficiary related to the exercise of any remedy or
right of Trustee or Beneficiary pursuant hereto and the reasonable expenses of
any such action or proceeding together with all statutory or other costs,
disbursements and allowances, interest thereon from the date of demand for
payment thereof at the lesser of (i) the rate per annum (computed on the basis
of the actual number of days elapsed over a year of 365 or 366 days, as the case
may be) equal to the sum of (A) the rate of interest publically announced by
Citibank in New York, New York, from time to time as its "base rate", plus (B)
2.00% and (ii) the rate which, together with all fees, charges and other amounts
which are treated as interest on such amounts under applicable law, constitutes
the maximum lawful rate which may be contracted for, charged, taken, received or
reserved by Trustee or Beneficiary in accordance with applicable law (the
"Default Interest Rate"), and such sums and the interest thereon shall, to the
11
extent permissible by law, be a lien on the Trust Property prior to any right,
title to, interest in or claim upon the Trust Property attached or accruing
subsequent to the recording of this Second Priority Deed of Trust and shall be
secured by this Second Priority Deed of Trust to the extent permitted by law.
Any payment of amounts due under this Second Priority Deed of Trust not made on
or before the due date for such payments shall accrue interest daily without
notice from the due date until paid at the Default Interest Rate, and such
interest at the Default Interest Rate shall be paid by Grantor to Trustee or
Beneficiary within 10 days after Mortgagor's receipt of notice from the Trustee
or Beneficiary that is due.
SECTION 1.04. Payment of Taxes, Liens and Charges. (a) Except to the
extent they are being contested in the manner permitted by the Second Priority
Debt Documents, Grantor will pay and discharge from time to time prior to the
time when the same shall become delinquent, and before any interest or penalty
accrues thereon or attaches thereto, (i) all taxes and assessments (general and
special), water and sewer rents and/or charges, public or private impositions,
levies, dues, permit, inspection and license fees, vault charges, service
charges, public or private common area charges or maintenance charges, utility
charges of every kind and nature which may become liens on the Trust Property
with priority over the lien of this Second Priority Deed of Trust and (ii) all
other material public or private charges, whether created or evidenced by
recorded or unrecorded documents or of a like or different nature, imposed upon
or assessed against the Trust Property or any part thereof or upon the Rents
from the Trust Property or arising in respect of the occupancy, use, operation
or possession thereof.
(b) In the event of the passage of any state, Federal, municipal or
other governmental law, order, rule or regulation subsequent to the date hereof
(i) deducting from the value of real property for the purpose of taxation any
lien or encumbrance thereon or in any manner changing or modifying the laws now
in force governing the taxation of this Second Priority Deed of Trust or debts
secured by mortgages or deeds of trust (other than laws governing income,
franchise and similar taxes generally) or the manner of collecting taxes thereon
and (ii) imposing a tax to be paid by Beneficiary, either directly or
indirectly, on this Second Priority Deed of Trust or any of the Senior Loan
Documents, or requiring an amount of taxes to be withheld or deducted therefrom,
Grantor will promptly notify Beneficiary of such event. In such event (A)
Grantor shall at the request of Beneficiary, execute an instrument or agreement
which obligates Grantor to make such additional payments as may be necessary to
12
place Grantor and the Second Priority Debt Parties in the same economic position
they would have been in with respect to the Senior Loans and other Second
Priority Debt Obligations if such law, order, rule or regulation had not been
passed and (B) Grantor shall make such additional payments.
(c) At any time that an Event of Default (as hereinafter defined) shall
occur and be continuing, or if required by any law applicable to Grantor or to
Beneficiary, Beneficiary shall have the right to direct Grantor to make an
initial deposit on account of real estate taxes and assessments, insurance
premiums and common area charges, levied against or payable in respect of the
Trust Property in advance and thereafter on a quarterly basis, each such deposit
to be equal to one-quarter of any such annual charges estimated in a reasonable
manner by Beneficiary in order to accumulate with Beneficiary sufficient funds
to pay such taxes, assessments, insurance premiums and charges. Any such
deposits held by Beneficiary shall be returned to Grantor within 30 days after
this Second Priority Deed of Trust is released or satisfied as provided in
Section 3.04.
SECTION 1.05. Payment of Closing Costs. Grantor shall pay all
reasonable costs incurred by or on behalf of the Beneficiary in connection with,
relating to or arising out of the preparation, execution and recording of this
Second Priority Deed of Trust, including title company charges, inspection
costs, recording fees and taxes, attorneys', engineers' and consultants' fees
and disbursements and all other, similar expenses of every kind.
SECTION 1.06. Plans; Alterations and Waste; Repairs. (a) To the extent
the same exist on the date hereof or are obtained in connection with future
permitted alterations, Grantor shall maintain a complete set of final plans,
specifications, blueprints and drawings for the Trust Property either at the
Trust Property or in a particular office at the headquarters of Grantor to which
Beneficiary shall have access upon reasonable advance notice and at reasonable
times.
(b) Grantor shall not:
(i) demolish or remove all or any material portion of the
Improvements;
(ii) commit any waste on the Trust Property or make any alterations
to the Trust Property which would materially diminish the utility of Trust
Property in the conduct of the business of the Grantor or its affiliates as
conducted thereon on the date hereof;
13
(iii) change the use of the Trust Property or take any other action
with respect to the Trust Property if it would materially increase the risk of
fire or any other hazard or violate the terms of any insurance policy required
by Section 1.06 hereof; without the consent of the Beneficiary in each instance,
such consent not to be unreasonably withheld or delayed.
(c) Grantor will keep and maintain the Improvements and the Fixtures in
good repair, working order and condition, reasonable wear and tear excepted.
SECTION 1.07. Insurance. Grantor will purchase and maintain liability
insurance, insurance on the Improvements and Fixtures and other insurance in
accordance with the terms of the Second Priority Debt Documents.
SECTION 1.08. Casualty; Condemnation/Eminent Domain. Grantor shall give
Beneficiary prompt written notice of any casualty or other damage to the Trust
Property or any proceeding for the taking of the Trust Property or any portion
thereof or interest therein under power of eminent domain or by condemnation or
any similar proceeding. The proceeds received by or on behalf of the Grantor in
respect of any such casualty, damage or taking shall constitute trust funds held
by the Grantor for the benefit of the Second Priority Debt Parties to be applied
to in accordance with the terms of the Second Priority Debt Documents.
SECTION 1.09. Assignment of Leases and Rents. (a) Grantor hereby
irrevocably and absolutely grants, transfers and assigns all of its right title
and interest in all Leases, together with any and all extensions and renewals
thereof for purposes of securing and discharging the performance by Grantor of
the Second Priority Debt Obligations. Grantor has not assigned or executed any
assignment of, and will not assign or execute any assignment of, any other Lease
or their respective Rents to anyone other than Beneficiary.
(b) Without Beneficiary's prior written consent, which shall not be
unreasonably withheld or delayed, Grantor will not enter into, modify, amend,
terminate or consent to the cancelation or surrender of any Lease.
14
(c) Subject to Section 1.09(d), Grantor has assigned and transferred to
Beneficiary all of Grantor's right, title and interest in and to the Rents now
or hereafter arising from each Lease heretofore or hereafter made or agreed to
by Grantor, it being intended that this assignment establish, subject to Section
1.09(d), an absolute transfer and assignment of all Rents and all Leases to
Trustee for the benefit of the Beneficiary and not merely to grant a security
interest therein. Subject to Section 1.09(d), Beneficiary may in Grantor's name
and stead (with or without first taking possession of any of the Trust Property
personally or by receiver as provided herein) operate the Trust Property and
rent, lease or let all or any portion of any of the Trust Property to any party
or parties at such rental and upon such terms as Beneficiary shall, in its sole
discretion, determine, and may collect and have the benefit of all of said Rents
arising from or accruing at any time thereafter or that may thereafter become
due under any Lease.
(d) So long as an Event of Default shall not have occurred and be
continuing, Beneficiary will not exercise any of its rights under Section
1.09(c), and Grantor shall receive and collect the Rents accruing under any
Lease; but after the happening and during the continuance of any Event of
Default, Beneficiary may, at its option, receive and collect all Rents and enter
upon the Premises and Improvements through its officers, agents, employees or
attorneys for such purpose and for the operation and maintenance thereof.
Grantor hereby irrevocably authorizes and directs each tenant, if any, and each
successor, if any, to the interest of any tenant under any Lease, respectively,
to rely upon any notice of a claimed Event of Default sent by Beneficiary to any
such tenant or any of such tenant's successors in interest, and thereafter to
pay Rents to Beneficiary without any obligation or right to inquire as to
whether an Event of Default actually exists and even if some notice to the
contrary is received from the Grantor, who shall have no right or claim against
any such tenant or successor in interest for any such Rents so paid to
Beneficiary. Each tenant or any of such tenant's successors in interest from
whom Beneficiary or any officer, agent, attorney or employee of Beneficiary
shall have collected any Rents, shall be authorized to pay Rents to Grantor only
after such tenant or any of their successors in interest shall have received
written notice from Beneficiary that the Event of Default is no longer
continuing, unless and until a further notice of an Event of Default is given by
Beneficiary to such tenant or any of its successors in interest.
(e) Beneficiary will not become a mortgagee in possession so long as it
does not enter or take actual possession of the Trust Property. In addition,
15
Beneficiary shall not be responsible or liable for performing any of the
obligations of the landlord under any Lease, for any waste by any tenant, or
others, for any dangerous or defective conditions of any of the Trust Property,
for negligence in the management, upkeep, repair or control of any of the Trust
Property or any other act or omission by any other person.
(f) Grantor shall furnish to Beneficiary, within 45 days after a
request by Beneficiary to do so (but no more frequently than twice annually), a
written statement containing the names of all tenants, subtenants and
concessionaires of the Premises or Improvements, the terms of any Lease, the
space occupied and the rentals or license fees payable thereunder.
SECTION 1.10. Restrictions on Transfers and Encumbrances. Except as
expressly permitted by the Second Priority Debt Documents or this Second
Priority Deed of Trust, Grantor shall not directly or indirectly sell, convey,
alienate, assign, lease, sublease, license, mortgage, pledge, encumber or
otherwise transfer, create, consent to or suffer the creation of any lien,
charges or any form of encumbrance upon any interest in or any part of the Trust
Property, or be divested of its title to the Trust Property or any interest
therein in any manner or way, whether voluntarily or involuntarily (other than
resulting from a condemnation), or engage in any common, cooperative, joint,
time-sharing or other congregate ownership of all or part thereof.
SECTION 1.11. Security Agreement. This Second Priority Deed of Trust is
both a mortgage of real property and a grant of a security interest in personal
property, and shall constitute and serve as a "Security Agreement" within the
meaning of the uniform commercial code as adopted in the state wherein the
Premises are located ("UCC"). Grantor has hereby granted unto Beneficiary a
security interest in and to all the Trust Property described in this Second
Priority Deed of Trust that is not real property, and simultaneously with the
recording of this Second Priority Deed of Trust, Grantor has filed or will file
UCC financing statements, and will file continuation statements prior to the
lapse thereof, at the appropriate offices in the state in which the Premises are
located to perfect the security interest granted by this Second Priority Deed of
Trust in all the Trust Property that is not real property. Grantor hereby
appoints Beneficiary as its true and lawful attorney-in-fact and agent, for
Grantor and in its name, place and stead, in any and all capacities, to execute
any document and to file the same in the appropriate offices (to the extent it
may lawfully do so), and to perform each and every act and thing reasonably
16
requisite and necessary to be done to perfect the security interest contemplated
by the preceding sentence. Beneficiary shall have all rights with respect to the
part of the Trust Property that is the subject of a security interest afforded
by the UCC in addition to, but not in limitation of, the other rights afforded
Beneficiary hereunder and under the Security Agreement.
SECTION 1.12. Filing and Recording. Grantor will cause this Second
Priority Deed of Trust, any other security instrument creating a security
interest in or evidencing the lien hereof upon the Trust Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien hereof upon, and the
security interest of Beneficiary in, the Trust Property. Grantor will pay all
filing, registration and recording fees, all Federal, state, county and
municipal recording, documentary or intangible taxes and other taxes, duties,
imposts, assessments and charges, and all reasonable expenses incidental to or
arising out of or in connection with the execution, delivery and recording of
this Second Priority Deed of Trust, any mortgage supplemental hereto, any
security instrument with respect to the Fixtures or any instrument of further
assurance.
SECTION 1.13. Further Assurances. Upon demand by Beneficiary, Grantor
will, at the cost of Grantor and without expense to Beneficiary, do, execute,
acknowledge and deliver all such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances as Beneficiary
shall from time to time reasonably require for the better conveying, assigning,
transferring and confirming unto Beneficiary the property and rights hereby
conveyed or assigned or intended now or hereafter so to be, or which Grantor may
be or may hereafter become bound to convey or assign to Beneficiary, or for
carrying out the intention or facilitating the performance of the terms of this
Second Priority Deed of Trust, or for filing, registering or recording this
Second Priority Deed of Trust, and on demand, Grantor will also execute and
deliver and hereby appoints Beneficiary as its true and lawful attorney-in-fact
and agent, for Grantor and in its name, place and stead, in any and all
capacities, to execute and file to the extent it may lawfully do so, one or more
financing statements, chattel mortgages or comparable security instruments
reasonably requested by Beneficiary to evidence more effectively the lien hereof
upon the Fixtures and to perform each and every act and thing requisite and
necessary to be done to accomplish the same.
17
SECTION 1.14. Additions to Trust Property. All right, title and
interest of Grantor in and to all extensions, improvements, betterments,
renewals, substitutes and replacements of, and all additions and appurtenances
to, the Trust Property hereafter acquired by or released to Grantor or
constructed, assembled or placed by Grantor upon the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case without any further
mortgage, conveyance, assignment or other act by Grantor, shall become subject
to the lien and security interest of this Second Priority Deed of Trust as fully
and completely and with the same effect as though now owned by Grantor and
specifically described in the grant of the Trust Property above, but at any and
all times Grantor will execute and deliver to Beneficiary any and all such
further assurances, mortgages, conveyances or assignments thereof as Beneficiary
may reasonably require for the purpose of expressly and specifically subjecting
the same to the lien and security interest of this Second Priority Deed of
Trust.
SECTION 1.15. No Claims Against Trustee or Beneficiary. Nothing
contained in this Second Priority Deed of Trust shall constitute any consent or
request by Beneficiary (or Trustee), express or implied, for the performance of
any labor or services or the furnishing of any materials or other property in
respect of the Trust Property or any part thereof, nor as giving Grantor any
right, power or authority to contract for or permit the performance of any labor
or services or the furnishing of any materials or other property in such fashion
as would permit the making of any claim against Beneficiary (or Trustee) in
respect thereof.
SECTION 1.16. Fixture Filing. Certain portions of the Trust Property
are or will become "fixtures" (as that term is defined in the UCC) on the Land,
and this Second Priority Deed of Trust, upon being filed for record in the real
estate records of the county wherein such fixtures are situated, shall operate
also as a financing statement filed as a fixture filing in accordance with the
applicable provisions of said UCC upon such portions of the Trust Property that
are or become fixtures. The addresses of the Grantor, as debtor, and
Beneficiary, as secured party, are set forth in the first page of this Second
Priority Deed of Trust.
SECTION 1.17. Notice Regarding Special Flood Hazard s. Beneficiary has
informed Grantor, and Grantor hereby acknowledges that it realizes, that the
Premises listed on Exhibit B is in an area identified by the Director of the
18
Federal Emergency Management Agency as a "special flood hazard area" described
in 12 C.F.R. ss.22.2, and Grantor hereby acknowledges that it has received,
prior to the making of the Senior Loans and the incurrence of indebtedness
constituting part of the Senior Obligations, the notice regarding Federal
disaster relief assistance referred to in the Appendix to 12 C.F.R. Part 22.
ARTICLE II
Defaults and Remedies
SECTION 2.01. Events of Default. Any event of default under the Second
Priority Debt Documents (as such term is defined therein, an "Event of Default")
shall constitute an Event of Default under this Second Priority Deed of Trust.
SECTION 2.02. Demand for Payment. If an Event of Default shall occur
and be continuing, then, without requirement of protest, demand or notice of
Beneficiary, Grantor will pay to Beneficiary all amounts due hereunder and under
the Second Priority Debt Documents and such further amount as shall be
sufficient to cover the costs and expenses of collection, including attorneys'
fees, disbursements and expenses incurred by Beneficiary, and Beneficiary shall
be entitled and empowered to institute an action or proceedings at law or in
equity for the collection of the sums so due and unpaid, to prosecute any such
action or proceedings to judgment or final decree, to enforce any such judgment
or final decree against Grantor and to collect, in any manner provided by law,
all moneys adjudged or decreed to be payable.
SECTION 2.03. Rights To Take Possession, Operate and Apply Revenues.
(a) If an Event of Default shall occur and be continuing, Grantor shall, upon
written demand of Beneficiary, forthwith surrender to Beneficiary actual
possession of the Trust Property and, if and to the extent not prohibited by
applicable law, Beneficiary itself, or by such officers or agents as it may
appoint, may then enter and take possession of all the Trust Property without
the appointment of a receiver or an application therefor, and exclude Grantor
and its agents and employees wholly therefrom.
(b) If Grantor shall for any reason fail to surrender or deliver the
Trust Property or any part thereof after such demand by Beneficiary, Beneficiary
may to the extent not prohibited by applicable law, obtain a judgment or decree
conferring upon Beneficiary the right to immediate possession or requiring
19
Grantor to deliver immediate possession of the Trust Property to Beneficiary, to
the entry of which judgment or decree Grantor hereby specifically consents.
Grantor will pay to Beneficiary, upon demand, all reasonable expenses of
obtaining such judgment or decree, including reasonable compensation to
Beneficiary's attorneys and agents with interest thereon at the Default Interest
Rate; and all such expenses and compensation shall, until paid, be secured by
this Second Priority Deed of Trust.
(c) Upon every such entry or taking of possession, Beneficiary may, to
the extent not prohibited by applicable law, hold, store, use, operate, manage
and control the Trust Property, conduct the business thereof and, from time to
time, (i) make all necessary and proper maintenance, repairs, renewals,
replacements, additions, betterments and improvements thereto and thereon, (ii)
purchase or otherwise acquire additional fixtures, personalty and other
property, (iii) insure or keep the Trust Property insured, (iv) manage and
operate the Trust Property and exercise all the rights and powers of Grantor to
the same extent as Grantor could in its own name or otherwise with respect to
the same, or (v) enter into any and all agreements with respect to the exercise
by others of any of the powers herein granted Beneficiary, all as may from time
to time be directed or determined by Beneficiary to be in its best interest and
Grantor hereby appoints Beneficiary as its true and lawful attorney-in-fact and
agent, for Grantor and in its name, place and stead, in any and all capacities,
to perform any of the foregoing acts. Beneficiary may collect and receive all
the Rents, issues, profits and revenues from the Trust Property, including those
past due as well as those accruing thereafter, and, after deducting (i) all
expenses of taking, holding, managing and operating the Trust Property
(including compensation for the services of all persons employed for such
purposes), (ii) the costs of all such maintenance, repairs, renewals,
replacements, additions, betterments, improvements, purchases and acquisitions,
(iii) the costs of insurance, (iv) such taxes, assessments and other similar
charges as Beneficiary may at its option pay, (v) other proper charges upon the
Trust Property or any part thereof and (vi) the compensation, expenses and
disbursements of the attorneys and agents of Beneficiary, Beneficiary shall
apply the remainder of the moneys and proceeds so received as provided in
Section 2.08.
(d) Whenever, before any sale of the Trust Property under Section 2.06,
all Second Priority Debt Obligations that are then due shall have been paid and
all Events of Default fully cured, Beneficiary will surrender possession of the
Trust Property back to Grantor, its successors or assigns. The same right of
taking possession shall, however, arise again if any subsequent Event of Default
shall occur and be continuing.
20
SECTION 2.04. Right To Cure Grantor's Failure to Perform. Should
Grantor fail in the payment, performance or observance of any term, covenant or
condition set forth in this Second Priority Deed of Trust or the Second Priority
Debt Documents (with respect to the Trust Property) for 10 days after notice of
such failure from Beneficiary (in the case of a monetary default) or 20 days
after notice of such failure from Beneficiary (in the case of a non-monetary
default), Beneficiary may pay, perform or observe the same, and all payments
made or costs or expenses incurred by Beneficiary in connection therewith shall
be secured hereby and shall be repaid by Grantor to Beneficiary with interest
thereon at the Default Interest Rate from the date incurred within 10 days after
demand made by Beneficiary. Beneficiary shall be the judge using reasonable
discretion of the necessity for any such actions and of the amounts to be paid.
Subject to the provisions of the Collateral Trust and Intercreditor Agreement,
Beneficiary is hereby empowered to enter and to authorize others to enter upon
the Premises or the Improvements or any part thereof for the purpose of
performing or observing any such defaulted term, covenant or condition without
having any obligation to so perform or observe and without thereby becoming
liable to Grantor, to any person in possession holding under Grantor or to any
other person.
SECTION 2.05. Right to a Receiver. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, of an Event of Default shall occur
and be continuing, Beneficiary, upon application to a court of competent
jurisdiction, shall be entitled as a matter of right to the appointment of a
receiver (which may be Beneficiary or an employee of Beneficiary or Trustee) to
take possession of and to operate the Trust Property and to collect and apply
the Rents. The receiver shall have all of the rights and powers permitted under
the laws of the state wherein the Trust Property is located. Grantor shall pay
to Beneficiary upon demand all reasonable expenses, including receiver's fees,
reasonable attorney's fees and disbursements, costs and agent's compensation
incurred pursuant to the provisions of this Section 2.05; and all such expenses
shall be secured by this Second Priority Deed of Trust and shall be, without
demand, immediately repaid by Grantor to Beneficiary with interest thereon at
the Default Interest Rate.
SECTION 2.06. Foreclosure and Sale. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, (a) if an Event of Default shall
occur and be continuing, Beneficiary may elect to sell the Trust Property or any
21
part of the Trust Property by exercise of the power of foreclosure or of sale
granted to Beneficiary and/or Trustee by applicable law or this Second Priority
Deed of Trust. In such case, Beneficiary or Trustee may commence a civil action
to foreclose this Second Priority Deed of Trust, or it may proceed and sell the
Trust Property to satisfy any Second Priority Debt Obligation. Trustee or
Beneficiary or an officer appointed by a judgment of foreclosure to sell the
Trust Property, may sell all or such parts of the Trust Property as may be
chosen by Trustee or Beneficiary at the time and place of sale fixed by it in a
notice of sale, either as a whole or in separate lots, parcels or items as
Trustee or Beneficiary shall deem expedient, and in such order as it may
determine, at public auction to the highest bidder. Trustee or Beneficiary or an
officer appointed by a judgment of foreclosure to sell the Trust Property may
postpone any foreclosure or other sale of all or any portion of the Trust
Property by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement or subsequently
noticed sale. Without further notice, Trustee or Beneficiary or an officer
appointed to sell the Trust Property may make such sale at the time fixed by the
last postponement, or may, in its discretion, give a new notice of sale. Any
person, including Grantor or Trustee or Beneficiary or any designee or affiliate
thereof, may purchase at such sale.
(b) The Trust Property may be sold subject to unpaid taxes and
Permitted Encumbrances, and, after deducting all costs, fees and expenses of
Trustee or Beneficiary (including costs of evidence of title in connection with
the sale), Trustee or Beneficiary or an officer that makes any sale shall apply
the proceeds of sale in the manner set forth in Section 2.08.
(c) Any foreclosure or other sale of less than the whole of the Trust
Property or any defective or irregular sale made hereunder shall not exhaust the
power of foreclosure or of sale provided for herein; and subsequent sales may be
made hereunder until the Second Priority Debt Obligations have been satisfied,
or the entirety of the Trust Property has been sold.
(d) If an Event of Default shall occur and be continuing, Beneficiary
may instead of, or in addition to, exercising the rights described in Section
2.06(a) above and either with or without entry or taking possession as herein
permitted, proceed by a suit or suits in law or in equity or by any other
appropriate proceeding or remedy (i) to specifically enforce payment of some or
22
all of the Second Priority Debt Obligations, or the performance of any term,
covenant, condition or agreement of this Second Priority Deed of Trust or any
other Senior Loan Document or any other right, or (ii) to pursue any other
remedy available to Beneficiary, all as Beneficiary shall determine most
effectual for such purposes.
SECTION 2.07. Other Remedies. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, (a) in case an Event of Default
shall occur and be continuing, Beneficiary may also exercise, to the extent not
prohibited by law, any or all of the remedies available to a secured party under
the UCC.
(b) In connection with a sale of the Trust Property or any Fixtures and
the application of the proceeds of sale as provided in Section 2.08, Beneficiary
shall be entitled to enforce payment of and to receive up to the principal
amount of the Second Priority Debt Obligations, plus all other charges, payments
and costs due under this Second Priority Deed of Trust, and to recover a
deficiency judgment for any portion of the aggregate principal amount of the
Second Priority Debt Obligations remaining unpaid, with interest.
SECTION 2.08. Application of Sale Proceeds and Rents. After any
foreclosure sale of all or any portion of the Trust Property, Beneficiary shall
receive and apply the proceeds of the sale together with any Rents that may have
been collected and any other sums that may then be held by Trustee or
Beneficiary under this Second Priority Deed of Trust as follows:
FIRST, to the payment of the costs and expenses of such sale,
including compensation to Trustee's and Beneficiary's attorneys and
agents, and of any judicial proceedings wherein the same may be made,
and of all expenses, liabilities and advances made or incurred by
Trustee and Beneficiary under this Second Priority Deed of Trust,
together with interest at the Default Interest Rate on all advances
made by Trustee and Beneficiary, including all taxes, assessments (or
other charges) (except any taxes, assessments or other charges subject
to which the Trust Property shall have been sold) and the cost of
removing any liens or encumbrances (except any liens or encumbrances
subject to which the Trust Property was sold);
SECOND, to the Beneficiary for the distribution to the Second
Priority Debt Parties for the satisfaction of the Second Priority Debt
Obligations owed to the Second Priority Debt Parties; and
23
THIRD, to the Grantor, its successors or assigns, or as a court
of competent jurisdiction may otherwise direct.
The Beneficiary shall have absolute discretion as to the time of application of
any such proceeds, moneys or balances in accordance with this Second Priority
Deed of Trust. In the event of any inconsistency between this Section 2.08 and
the Collateral Trust and Intercreditor Agreement, the Collateral Trust and
Intercreditor Agreement shall control. Upon any sale of the Trust Property by
the Trustee or Beneficiary (including pursuant to a power of sale granted by
statute or under a judicial proceeding), the receipt of the Trustee or
Beneficiary or of the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Trust Property so sold and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Trustee or Beneficiary or such officer or be
answerable in any way for the misapplication thereof.
SECTION 2.09. Grantor as Tenant Holding Over. If Grantor remains in
possession of any of the Trust Property after any foreclosure sale by Trustee or
Beneficiary, at Beneficiary's election Grantor shall be deemed a tenant holding
over and shall forthwith surrender possession to the purchaser or purchasers at
such sale or be summarily dispossessed or evicted according to provisions of law
applicable to tenants holding over.
SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws. Grantor waives, to the extent not prohibited by law, (i) the
benefit of all laws now existing or that hereafter may be enacted (x) providing
for any appraisement or valuation of any portion of the Trust Property and/or
(y) in any way extending the time for the enforcement or the collection of
amounts due under any of the Second Priority Debt Obligations or creating or
extending a period of redemption from any sale made in collecting said debt or
any other amounts due Beneficiary, (ii) any right to at any time insist upon,
plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any homestead exemption, stay, statute of limitations,
extension or redemption, or sale of the Trust Property as separate tracts, units
or estates or as a single parcel in the event of foreclosure or notice of
deficiency, and (iii) all rights of redemption, valuation, appraisement, stay of
24
execution, notice of election to mature or declare due the whole of or each of
the Second Priority Debt Obligations and marshaling in the event of foreclosure
of this Second Priority Deed of Trust.
SECTION 2.11. Discontinuance of Proceedings. In case Trustee or
Beneficiary shall proceed to enforce any right, power or remedy under this
Second Priority Deed of Trust by foreclosure, entry or otherwise, and such
proceedings shall be discontinued or abandoned for any reason, or shall be
determined adversely to Trustee or Beneficiary, then and in every such case
Grantor and Trustee and Beneficiary shall be restored to their former positions
and rights hereunder, and all rights, powers and remedies of Trustee and
Beneficiary shall continue as if no such proceeding had been taken.
SECTION 2.12. Suits To Protect the Trust Property. Beneficiary shall
have power (a) to institute and maintain suits and proceedings to prevent any
impairment of the Trust Property by any acts that may be unlawful or in
violation of this Second Priority Deed of Trust, (b) to preserve or protect its
interest in the Trust Property and in the Rents arising therefrom and (c) to
restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of or compliance with such enactment, rule or order
would impair the security or be prejudicial to the interest of Beneficiary
hereunder.
SECTION 2.13. Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting Grantor, Beneficiary shall, to the extent permitted
by law, be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of Beneficiary allowed in
such proceedings for the Second Priority Debt Obligations secured by this Second
Priority Deed of Trust at the date of the institution of such proceedings and
for any interest accrued, late charges and additional interest or other amounts
due or that may become due and payable hereunder after such date.
SECTION 2.14. Possession by Beneficiary. Notwithstanding the
appointment of any receiver, liquidator or trustee of Grantor, any of its
property or the Trust Property, Beneficiary shall be entitled, to the extent not
prohibited by law, to remain in possession and control of all parts of the Trust
Property now or hereafter granted under this Second Priority Deed of Trust to
Beneficiary in accordance with the terms hereof and applicable law.
25
SECTION 2.15. Waiver. (a) No delay or failure by Beneficiary to
exercise any right, power or remedy accruing upon any breach or Event of Default
shall exhaust or impair any such right, power or remedy or be construed to be a
waiver of any such breach or Event of Default or acquiescence therein; and every
right, power and remedy given by this Second Priority Deed of Trust to
Beneficiary may be exercised from time to time and as often as may be deemed
expedient by Beneficiary. No consent or waiver by Beneficiary to or of any
breach or Event of Default by Grantor in the performance of the Second Priority
Debt Obligations shall be deemed or construed to be a consent or waiver to or of
any other breach or Event of Default in the performance of the same or of any
other Second Priority Debt Obligations by Grantor hereunder. No failure on the
part of Beneficiary to complain of any act or failure to act or to declare an
Event of Default, irrespective of how long such failure continues, shall
constitute a waiver by Beneficiary of its rights hereunder or impair any rights,
powers or remedies consequent on any future Event of Default by Grantor.
(b) Even if Beneficiary (i) grants some forbearance or an extension of
time for the payment of any sums secured hereby, (ii) takes other or additional
security for the payment of any sums secured hereby, (iii) waives or does not
exercise some right granted herein or under the Second Priority Debt Documents,
(iv) releases a part of the Trust Property from this Second Priority Deed of
Trust, (v) agrees to change some of the terms, covenants, conditions or
agreements of any of the Second Priority Debt Documents, (vi) consents to the
filing of a map, plat or replat affecting the Premises, (vii) consents to the
granting of an easement or other right affecting the Premises or (viii) makes or
consents to an agreement subordinating Beneficiary's lien on the Trust Property
hereunder; no such act or omission shall preclude Beneficiary from exercising
any other right, power or privilege herein granted or intended to be granted
in the event of any breach or Event of Default then made or of any subsequent
default; nor, except as otherwise expressly provided in an instrument executed
by Beneficiary, shall this Second Priority Deed of Trust be altered thereby. In
the event of the sale or transfer by operation of law or otherwise of all or
part of the Trust Property, Beneficiary is hereby authorized and empowered to
deal with any vendee or transferee with reference to the Trust Property secured
hereby, or with reference to any of the terms, covenants, conditions or
agreements hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any
liabilities, obligations or undertakings.
26
SECTION 2.16. Remedies Cumulative. No right, power or remedy conferred
upon or reserved to Trustee or Beneficiary by this Second Priority Deed of Trust
is intended to be exclusive of any other right, power or remedy, and each and
every such right, power and remedy shall be cumulative and concurrent and in
addition to any other right, power and remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
ARTICLE III
Miscellaneous
SECTION 3.01. Partial Invalidity. In the event any one or more of the
provisions contained in this Second Priority Deed of Trust shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such validity,
illegality or unenforceability shall, at the option of Beneficiary, not affect
any other provision of this Second Priority Deed of Trust, and this Second
Priority Deed of Trust shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein.
SECTION 3.02. Notices. All notices, requests, demands and other
communications to any party hereunder shall be in writing (including bank wire,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Trustee or Beneficiary, at its address at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000 or facsimile number
(000) 000-0000 and (y) in the case of the Grantor, at the addresses, in care of
Rite Aid Corporation, 00 Xxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxxxx 00000 or facsimile
number (000) 000-0000. Each such notice, request or other communication shall be
effective if given by facsimile, which such communication is transmitted to the
facsimile number specified in this Section and confirmation of receipt is
received, if given by mail, 72 hours after such communication is deposited in
the mails with first class postage prepaid, addressed as aforesaid or if given
by any other means, when delivered at the addressed specified in this Section.
SECTION 3.03. Successors and Assigns. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the permitted
successors and assigns of Grantor and the successors and assigns of Beneficiary.
27
SECTION 3.04. Satisfaction and Cancelation. (a) The conveyance to
Trustee or Beneficiary of the Trust Property as security created and consummated
by this Second Priority Deed of Trust shall be null and void when all the Second
Priority Debt Obligations have been indefeasibly paid in full in accordance with
the terms of the Second Priority Debt Documents and no further Second Priority
Debt Obligations are outstanding.
(b) Upon a sale or financing by Grantor of all or any portion of the
Trust Property that is permitted by the Senior Loan Documents and the Second
Priority Debt Documents and the application of the Net Proceeds of such sale or
financing in accordance with the Collateral Trust and Intercreditor Agreement or
Second Priority Debt Documents, as applicable, the lien of this Second Priority
Deed of Trust shall be released from the applicable portion of the Trust
Property. Grantor shall give the Beneficiary reasonable written notice of any
sale or financing of the Trust Property prior to the closing of such sale or
financing.
(c) In connection with any termination or release pursuant to paragraph
(a), the Second Priority Deed of Trust shall be marked "satisfied" by the
Beneficiary, and this Second Priority Deed of Trust shall be canceled of record
at the request and at the expense of the Grantor. Beneficiary shall execute any
documents reasonably requested by Grantor to accomplish the foregoing or to
accomplish any release contemplated by this Section 3.04 and Grantor will pay
all costs and expenses, including reasonable attorneys' fees, disbursements and
other charges, incurred by Beneficiary in connection with the preparation and
execution of such documents.
SECTION 3.05. Definitions. As used in this Second Priority Deed of
Trust, the singular shall include the plural as the context requires and the
following words and phrases shall have the following meanings: (a) "including"
shall mean "including but not limited to"; (b) "provisions" shall mean
"provisions, terms, covenants and/or conditions"; (c) "lien" shall mean "lien,
charge, encumbrance, security interest, mortgage or deed of trust";
(d) "obligation" shall mean "obligation, duty, covenant and/or condition"; (e)
"Trustee" shall mean "Trustee, for the benefit of the Beneficiary and in
accordance with the Second Priority Debt Documents,"; and (f) "any of the Trust
Property" shall mean "the Trust Property or any part thereof or interest
therein". Any act that Trustee or Beneficiary is permitted to perform hereunder
may be performed at any time and from time to time by Trustee or Beneficiary or
any person or entity designated by Beneficiary.
28
Any act that is prohibited to Grantor hereunder is also prohibited to all
lessees of any of the Trust Property, except to the extent that a Lease executed
prior to the date hereof expressly permits such act without the consent of the
Grantor or the holder of any mortgage or deed of trust. Each appointment of
Beneficiary as attorney-in-fact for Grantor under this Second Priority Deed of
Trust is irrevocable, with power of substitution and coupled with an interest.
Subject to the express provisions to the contrary contained in this Second
Priority Deed of Trust, Beneficiary has the right to refuse to grant its
consent, approval or acceptance or to indicate its satisfaction, in its sole
discretion, whenever such consent, approval, acceptance or satisfaction is
required hereunder. To the extent that this Second Priority Deed of Trust
provides that any particular consent, approval, acceptance or satisfaction is
subject to the terms of the Second Priority Debt Documents, it shall be granted
or withheld as provided in the Second Priority Debt Documents.
SECTION 3.06. Rules of Interpretation. References in this Second
Priority Deed of Trust to "Articles", "Sections", "Schedules" or "Exhibits"
shall be to Articles, Sections, Schedules or Exhibits of or to this Second
Priority Deed of Trust unless otherwise specifically provided. Any defined terms
may, unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Writing", "written" and comparable terms refer to
printing, typing and other means of reproducing words in a visible form.
References to any agreement or contract are to such agreement or contract as
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof. References to any Person include the successors and assigns
of such Person. References "from" or "through" any date mean, unless otherwise
specified, "from and including" or "through and including" respectively.
SECTION 3.07. Multisite Real Estate Transaction. Grantor acknowledges
that this Second Priority Deed of Trust is one of a number of Other Deeds of
Trust that secure the Second Priority Debt Obligations. Grantor agrees that the
lien of this Second Priority Deed of Trust shall be absolute and unconditional
and shall not in any manner be affected or impaired by any acts or omissions
whatsoever of Beneficiary, and without limiting the generality of the foregoing,
the lien hereof shall not be impaired by any acceptance by the Beneficiary of
any security for or guarantees of any of the Second Priority Debt Obligations
hereby secured, or by any failure, neglect or omission on the part of
Beneficiary to realize upon or protect any Second Priority Debt Obligation or
indebtedness hereby secured or any collateral security therefor including the
29
Other Deeds of Trust and other Second Priority Debt Documents. The lien hereof
shall not in any manner be impaired or affected by any release (except as to the
property released), sale, pledge, surrender, compromise, settlement, renewal,
extension, indulgence, alteration, changing, modification or disposition of any
of the Second Priority Debt Obligations secured or of any of the collateral
security therefor, including the Other Deeds of Trust and other Second Priority
Debt Documents or of any guarantee thereof, and Beneficiary may at its
discretion foreclose, exercise any power of sale, or exercise any other remedy
available to it under any or all of the Other Deeds of Trust and other Second
Priority Debt Documents without first exercising or enforcing any of its rights
and remedies hereunder. Such exercise of Beneficiary's rights and remedies under
any or all of the Other Deeds of Trust and other Second Priority Debt Documents
shall not in any manner impair the indebtedness hereby secured or the lien of
this Second Priority Deed of Trust and any exercise of the rights or remedies of
Beneficiary hereunder shall not impair the lien of any of the Other Deeds of
Trust and other Second Priority Debt Documents or any of Beneficiary's rights
and remedies thereunder. Grantor specifically consents and agrees that
Beneficiary may exercise its rights and remedies hereunder and under the Other
Deeds of Trust and other Second Priority Debt Documents separately or
concurrently and in any order that it may deem appropriate and waives any rights
of subrogation.
SECTION 3.08. Subordination; Intercreditor Agreement. The lien of this
Second Priority Deed of Trust is junior and subordinate to the lien of any Deed
of Trust now or hereafter granted to Citicorp USA, Inc. and its successors and
assigns as collateral agent for certain secured parties, including the lenders
from time to time part to that certain Senior Credit Agreement dated as of the
date hereof, as amended, replaced or refinanced from time to time, with Rite Aid
Corporation and its successors and assigns in accordance with the provisions of
the Collateral Trust and Intercreditor Agreement.
SECTION 3.09. Collateral Trust and Intercreditor Agreement.
Notwithstanding any provision to the contrary contained herein, the terms of
this Second Priority Deed of Trust, the Liens created hereby, and the rights and
remedies of the Second Priority Collateral Trustee and the Second Priority Debt
Parties hereunder, are subject to the Collateral Trust and Intercreditor
Agreement.
SECTION 3.10. Amendments in Writing. None of the terms or provisions
of this Second Priority Deed of Trust may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Grantor and
30
the Second Priority Collateral Trustee with the written consent of the Second
Priority Instructing Group, provided that (i) any provision of this Second
Priority Deed of Trust may be waived by the Second Priority Instructing Group
and (ii) any amendment, waiver, supplement or other modification which by its
terms adversely affects the rights of the Second Priority Debt Parties under a
particular Second Priority Facility in a manner different from its effect on the
other Second Priority Facilities shall only be effective with the consent of the
Second Priority Representative for each Second Priority Facility so adversely
affected.
ARTICLE IV
Particular Provisions
This Second Priority Deed of Trust is subject to the following
provisions relating to the particular laws of the state wherein the Premises are
located:
SECTION 4.01. Applicable Law; Certain Particular Provisions. This
Second Priority Deed of Trust shall be governed by and construed in accordance
with the internal law of the State in which the Trust Property is located
without regard to principles of conflicts of laws and Grantor and Beneficiary
agree to submit to jurisdiction and the laying of venue for any suit on this
Second Priority Deed of Trust in such state, except that the internal laws of
the State of New York (without regard to principles of conflicts of laws) shall
govern (i) those terms and conditions contained in the Second Priority Debt
Documents and/or the Second Priority Subsidiary Guarantee Agreement which are
incorporated by reference herein and (ii) the resolution of issues arising under
the Second Priority Debt Documents and/or the Second Priority Subsidiary
Guarantee Agreement to the extent that such resolution is necessary to the
interpretation of this Second Priority Deed of Trust. The terms and provisions
set forth in Appendix A attached hereto are hereby incorporated by reference as
though fully set forth herein. In the event of any conflict between the terms
and provisions contained in the body of this Second Priority Deed of Trust and
the terms and provisions set forth in Appendix A, the terms and provisions set
forth in Appendix A shall govern and control.
SECTION 4.02 Trustee's Powers and Liabilities. (a) Trustee, by
acceptance hereof, covenants faithfully to perform and fulfill the trusts herein
created, being liable, however, only for gross negligence, bad faith or wilful
31
misconduct, and hereby waives any statutory fee and agrees to accept reasonable
compensation, in lieu thereof, for any services rendered by it in accordance
with the terms hereof. All authorities, powers and discretions given in this
Second Priority Deed of Trust to Trustee and/or Beneficiary may be exercised by
either, without the other, with the same effect as if exercised jointly.
(b) Trustee may resign at any time upon giving 30 days' notice in
writing to Grantor and to Beneficiary.
(c) Beneficiary may remove Trustee at any time or from time to time and
select a successor trustee. In the event of the death, removal, resignation,
refusal to act, inability to act or absence of Trustee from the state in which
the premises are located, or in its sole discretion for any reason whatsoever,
Beneficiary may, upon notice to the Grantor and without specifying the reason
therefor and without applying to any court, select and appoint a successor
trustee, and all powers, rights, duties and authority of the former trustee, as
aforesaid, shall thereupon become vested in such successor. Such substitute
trustee shall not be required to give bond for the faithful performance of his
duties unless required by Beneficiary. Such substitute trustee shall be
appointed by written instrument duly recorded in the county where the Land is
located. Grantor hereby ratifies and confirms any and all acts that the herein
named Trustee, or his successor or successors in this trust, shall do lawfully
by virtue hereof. Grantor hereby agrees, on behalf of itself and its heirs,
executors, administrators and assigns, that the recitals contained in any deed
or deeds executed in due form by any Trustee or substitute trustee, acting under
the provisions of this instrument, shall be prima facie evidence of the facts
recited, and that it shall not be necessary to prove in any court, otherwise
than by such recitals, the existence of the facts essential to authorize the
execution and delivery of such deed or deeds and the passing of title thereby.
(d) Trustee shall not be required to see that this Second Priority Deed
of Trust is recorded, nor liable for its validity or its priority as a first
deed of trust, or otherwise, nor shall Trustee be answerable or responsible for
performance or observance of the covenants and agreements imposed upon Grantor
or Beneficiary by this Second Priority Deed of Trust or any other agreement.
Trustee, as well as Beneficiary, shall have authority in their respective
discretion to employ agents and attorneys in the execution of this trust and to
protect the interest of the Beneficiary hereunder, and to the extent permitted
by law they shall be compensated and all expenses relating to the employment of
32
such agents and/or attorneys, including expenses of litigations, shall be paid
out of the proceeds of the sale of the Trust Property conveyed hereby should a
sale be had, but if no such sale be had, all sums so paid out shall be
recoverable to the extent permitted by law by all remedies at law or in equity.
(e) At any time, or from time to time, without liability therefor and
with 10 days' prior written notice to Grantor, upon written request of
Beneficiary and without affecting the effect of this Second Priority Deed of
Trust upon the remainder of the Trust Property, Trustee may (i) reconvey any
part of the Trust Property, (ii) consent in writing to the making of any map or
plat thereof, so long as Grantor has consented thereto, (iii) join in granting
any easement thereon, so long as Grantor has consented thereto, or (iv) join in
any extension agreement or any agreement subordinating the lien or charge
hereof.
[The balance of this page intentionally left blank.]
33
IN WITNESS WHEREOF, this Second Priority Deed of Trust has been duly
executed and delivered to Trustee and Beneficiary by Grantor on the date of the
acknowledgment attached hereto.
RITE AID OF WEST VIRGINIA, INC.,
a West Virginia corporation,
by:_____________________________
Name:
Title:
Attest:
by:_____________________________
Name:
Title:
34
[NEED LOCAL FORM OF ACKNOWLEDGMENT]
Exhibit A
to Second Priority Deed of Trust
Description of Land
All that certain tract or parcel of land, together with the appurtenances
thereunto belonging or appertaining, situate near Rock Branch (Creek) in
Pocatalico District, Xxxxxx County, West Virginia, being all of Parcels 4, 5 and
6 of the "Rock Branch Regional Industrial Park" and being 23.4949 acres, more or
less, shown on a map prepared by Xxxxxx, Needles, Xxxxxx & Bergendoff (HNTB),
signed by X. X. Xxxxx, Professional Engineer, dated October 7, 1977, and revised
November 10, 1977, and entitled "Map Showing a Parcel of Land Owned by Xxxxxx
County Development Authority to be Conveyed to Rite Aid of West Virginia, Inc.
Situate Pocatalico District Xxxxxx County West Virginia" Scale 1" = 100', which
map is attached hereto and made a part hereof, said parcel being more
particularly bounded and described as follows:
BEGINNING at a concrete monument in the South right-of-way line of State Route
35/15 (Xxxxxx Road) point being 25 feet left of centerline station 18 + 19.43 of
West Virginia Department of Highways Project APL 9376 (001) point also being in
the East right-of-way of a railroad spur; thence leaving said railroad and with
the South line of Route 35/15, S. 77(degrees) 19' 19" E. for 119.43 feet to a
concrete right-of-way marker, point being 25 feet left of centerline station 17
+ 00; thence continuing with said right-of-way, N. 12(degrees) 40' 41" E. for
5.00 feet to a concrete right-of-way marker, point being 20 feet left of
centerline station 17 + 00; thence continuing with the South right-of-way line
of Route 35/15, S. 77(degrees) 19' 19" E. for 550.00 feet to a concrete monument
20 feet left of centerline station 11 + 50; thence continuing with said
right-of-way line, S. 67(degrees) 23' 45" E. for 203.04 feet to a point 55 feet
left of centerline station 9 + 00; thence continuing with said right-of-way, S.
68(degrees) 13' 54" E. for 50.64 feet to a point 63 feet left of centerline
station 9 + 00; thence again with said south right-of-way line, S. 77(degrees)
19' 19" E. for 33.01 feet to a point in the line of X. X. Xxxxxxxx, point being
63 feet left of centerline station 8 + 66.99, point also being S. 14(degrees)
37' 26" W. 41.88 feet from a copperweld pin in the bank of Route 35/15; thence
leaving the right-of-way line of Route 35/15 and with X. X. Xxxxxxxx line, S. 14
(degrees) 37' 26" W. for 141.56 feet to a 1-1/2 inch steel pin on the East bank
of Rock Branch Creek (formerly Xxxxxxxxx Creek), point being the common corner
of X. X. Xxxxxxxx and X. X. Xxxxxxxx; thence leave Xxxxxxxx and
with Xxxxxxxx line, S. 13(degrees) 54' 14" W. for 75.87 feet to a point on the
bank of said creek, point being the common corner to X. X. Xxxxxxxx and Guy and
Xxxx Xxxx; thence leave Xxxxxxxx and with the Xxxx line, S. 13(degrees) 34' 00"
W. for 74.13 feet to a point on Rock Branch Creek; thence continuing with the
Xxxx line, S. 30(degrees) 11' 00" W. for 80.97 feet to a point on said creek,
common corner to Xxxx and Audis and Xxxxx Xxxxxx; thence leaving Xxxx and with
the Xxxxxx line, S. 28(degrees) 08' 26" W. for 200.00 feet to a 1/2 inch iron
pin on the West bank of Rock Branch Creek, point being the common corner to
Xxxxxx and Xxxx and Xxxxxxx Xxxxxxxx; thence leave Xxxxxx and with Xxxxxxxx'x
line, S. 28(degrees) 08' 26" W. for 75.18 feet to a concrete monument, common
corner to Xxxxxxxx and Parcel 3 of Rock Branch Industrial Park; thence leaving
Xxxxxxxx and with the dividing line of Parcels 3 and 6 of said Park, S.
35(degrees) 55' 21" W. for 602.16 feet to a set 1/2 inch reinforcing rod in the
North line of Xxxxxxxx Drive, point being 37.5 feet from centerline; thence
leave Parcel 3 and with the north line of said Drive, and with a curve having a
radius of 801.44 feet, chord of said curve being N. 69(degrees) 27' 14" W. for
113.44 feet to a copperweld pin 37.5 feet left of P. C. Station 20 + 82.24 of
Xxxxxxxx Drive; thence continuing with a line 37.5 feet north of and parallel
with said centerline, N. 73(degrees) 30' 44" W. for 534.13 feet to a set 1/2
inch reinforcing rod 37.5 feet North of centerline of Xxxxxxxx Drive and also
being in the East line of a railroad right-of-way, being 12.5 feet from the
centerline of said railroad; thence leaving Xxxxxxxx Drive and with the East
line of said railroad, N. 14(degrees) 25' 32" E. for 1174.70 feet to the place
of beginning.
Street Address:
Xxxx Xxxxxx Xxxxxxxxxx Xxxx
Xxxx, XX 00000
Exhibit B
to Second Priority Deed of Trust
Premises Located in a
Special Flood Hazard Area
None.
Appendix A
to Second Priority Deed of Trust
Local Law Provisions
Appendix B
to Second Priority Deed of Trust
Definitions Annex
================================================================================
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE
A SECOND PRIORITY CREDIT LINE DEED OF TRUST, SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS
From
THRIFTY PAYLESS, INC.
TO
FIRST AMERICAN TITLE COMPANY LOS ANGELES
for the benefit of
WILMINGTON TRUST COMPANY,
as SECOND PRIORITY COLLATERAL TRUSTEE FOR
THE BENEFIT OF THE SECOND PRIORITY DEBT PARTIES
as BENEFICIARY
Dated: as of June 27, 2001
Premises: Woodland Distribution Center
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Yolo
County.
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
Representations, Warranties and Covenants
of Grantor
SECTION 1.01. Title ......................................................... 9
SECTION 1.02. Senior Loan Documents ......................................... 10
SECTION 1.03. Second Priority Debt Documents;
Second Priority Subsidiary Guarantee Agreement .............. 11
SECTION 1.04. Payment of Taxes, Liens and Charges ........................... 12
SECTION 1.05. Payment of Closing Costs ...................................... 13
SECTION 1.06. Plans; Alterations and Waste; Repairs ......................... 13
SECTION 1.07. Insurance ..................................................... 14
SECTION 1.08. Casualty; Condemnation/Eminent Domain ......................... 14
SECTION 1.09. Assignment of Leases and Rents ................................ 14
SECTION 1.10. Restrictions on Transfers and Encumbrances .................... 16
SECTION 1.11. Security Agreement ............................................ 16
SECTION 1.12. Filing and Recording .......................................... 16
SECTION 1.13. Further Assurances ............................................ 17
SECTION 1.14. Additions to Trust Property ................................... 17
SECTION 1.15. No Claims Against Trustee or Beneficiary ...................... 18
SECTION 1.16. Fixture Filing ................................................ 18
SECTION 1.17. Notice Regarding Special Flood Hazards ........................ 18
ARTICLE II
Default and Remedies
SECTION 2.01. Events of Default ............................................. 19
SECTION 2.02. Demand for Payment ............................................ 19
SECTION 2.03. Rights To Take Possession, Operate and Apply Revenues ......... 19
SECTION 2.04. Right To Cure Grantor's Failure to Perform .................... 20
SECTION 2.05. Right to a Receiver ........................................... 21
SECTION 2.06. Foreclosure and Sale .......................................... 21
SECTION 2.07. Other Remedies ................................................ 22
SECTION 2.08. Application of Sale Proceeds and Rents ........................ 23
SECTION 2.09. Grantor as Tenant Holding Over ................................ 24
SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws ......................................... 24
SECTION 2.11. Discontinuance of Proceedings ................................. 24
SECTION 2.12. Suits To Protect the Trust Property ........................... 25
SECTION 2.13. Filing Proofs of Claim ........................................ 25
SECTION 2.14. Possession by Beneficiary ..................................... 25
SECTION 2.15. Waiver ........................................................ 25
SECTION 2.16. Remedies Cumulative ........................................... 26
ARTICLE III
Miscellaneous
SECTION 3.01. Partial Invalidity ............................................ 27
SECTION 3.02. Notices ....................................................... 27
SECTION 3.03. Successors and Assigns ........................................ 27
SECTION 3.04. Satisfaction and Cancelation. ................................. 27
SECTION 3.05. Definitions ................................................... 28
SECTION 3.06. Rules of Interpretation ....................................... 29
SECTION 3.07. Multisite Real Estate Transaction ............................. 29
SECTION 3.08. Subordination; Intercreditor Agreement ........................ 30
SECTION 3.09 Collateral Trust and Intercreditor Agreement ................... 30
SECTION 3.10. Amendments in Writing ......................................... 30
ARTICLE IV
Particular Provisions
SECTION 4.01. Applicable Law; Certain Particular Provisions ................. 31
SECTION 4.02. Trustee's Powers and Liabilities .............................. 31
Exhibit A Description of Land
Exhibit B Premises Located in a Special Flood Hazard Area
Appendix A Local Law Provisions
Appendix B Definitions Annex
THIS SECOND PRIORITY CREDIT LINE DEED OF TRUST, SECURITY
AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS dated as of June 27, 2001
(this "Second Priority Deed of Trust"), by THRIFTY PAYLESS, INC., a
California corporation, having an office at 00 Xxxxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxxxx 00000 (the "Grantor"), to FIRST AMERICAN TITLE COMPANY LOS
ANGELES, having an office at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx, XX
00000, as trustee ("Trustee") for the benefit of WILMINGTON TRUST
COMPANY, a Delaware banking corporation, having an office at Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xx., Xxxxxxxxxx, XX 00000-0000 (the
"Beneficiary") as Second Priority Collateral Trustee for the benefit
of the Second Priority Debt Parties.
W I T N E S S E T H T H A T
Capitalized terms used but not defined in this Second Priority Deed of
Trust have the meanings given to them in the Definitions Annex annexed hereto as
Appendix B.
Reference is made to (i) the Senior Credit Agreement dated as of June
__, 2001 (the "Senior Credit Agreement"), among Rite Aid Corporation, a
Delaware corporation (the "Borrower"), the banks from time to time party
thereto and Citicorp USA, Inc., as Senior Administrative Agent and Senior
Collateral Agent for the banks and (ii) the Collateral Trust and Intercreditor
Agreement dated as of the date hereof (the "Collateral Trust and Intercreditor
Agreement"), among Rite Aid Corporation, certain subsidiaries of Rite Aid
Corporation, Wilmington Trust Company as Second Priority Collateral Trustee,
Citicorp USA, Inc., as Senior Collateral Agent, and each Second Priority
Representative, as amended from time to time.
Reference is made to the Senior Deed of Trust dated as of June __, 2001
(the "Senior Deed of Trust"), with Citicorp USA, Inc., as Senior Collateral
Agent pursuant to which the Grantor has granted to the Senior Collateral Agent a
first mortgage lien on the property described herein. The lien of this Second
Priority Deed of Trust is intended by the Grantor and the Trustee or Beneficiary
to be junior and subordinate to the Lien of the Senior Deed of Trust.
Grantor is a wholly owned subsidiary of the Borrower and will derive
substantial benefit from the making of the Second Priority Debt Documents. In
order to induce the Second Priority Debt Parties, among other things, amend and
extend the Second Priority Debt Documents, the Grantor has agreed to (i)
5
guarantee the due and punctual payment of the Second Priority Debt Obligations
of the Borrower under the Second Priority Debt Documents pursuant to the second
priority subsidiary guarantee agreement dated as of even date herewith (the
"Second Priority Subsidiary Guarantee Agreement") made by Grantor and certain
other Subsidiaries of Borrower (each, a "Subsidiary Guarantor") in favor of
Trustee in its capacity as Second Priority Collateral Trustee, and (ii) execute
and deliver this Second Priority Deed of Trust in the form hereof to secure all
of the Second Priority Debt Obligations guaranteed by Grantor pursuant to the
Second Priority Subsidiary Guarantee Agreement.
Pursuant to the requirements of the Second Priority Debt Documents and
the Second Priority Guarantee Agreement, the Grantor therefore grants this Deed
of Trust to create a lien on and a security interest in the Trust Property (as
defined herein) to secure the payment and performance of the Second Priority
Debt Obligations. The Second Priority Debt Documents also require the granting
by other Subsidiary Guarantors of mortgages, deeds of trust and deeds to secure
debt (the "Other Deeds of Trust") that create liens on and security interests
in certain parcels of real property (each, a "Trust Property") other than the
Trust Property to secure the payment and performance of the Second Priority Debt
Obligations.
Granting Clauses
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and in order to
secure the due and punctual payment and performance of the Second Priority Debt
Obligations for the benefit of the Second Priority Debt Parties, Grantor hereby
grants, conveys, mortgages, assigns and pledges to the Trustee and/or
Beneficiary and its successors and assigns forever, a security interest in, all
the following described property (the "Trust Property") whether now owned or
held or hereafter acquired:
(1) the land more particularly described on Exhibit A hereto (the
"Land"), together with all rights appurtenant thereto which may, by
their terms or as a matter of law, be conveyed or assigned along with
the Land, including the easements over certain other adjoining land
granted by any easement agreements, covenant or restrictive agreements
and all air rights, mineral rights, water rights, oil and gas rights
and development rights, if any, relating thereto, and also together
with all of the other easements, rights, privileges, interests,
hereditaments and appurtenances thereunto belonging or in any way
appertaining and all of the estate, right, title, interest, claim or
6
demand whatsoever of Grantor therein and in the streets and ways
adjacent thereto, either in law or in equity, in possession or
expectancy, now or hereafter acquired (the "Premises");
(2) all buildings, improvements, structures, paving, parking
areas, walkways and landscaping now or hereafter erected or located
upon the Land, and all fixtures of every kind and type affixed to the
Premises or attached to or forming part of any structures, buildings or
improvements and replacements thereof now or hereafter erected or
located upon the Land (the "Improvements");
(3) all apparatus, appliances, building materials, equipment,
fittings, machinery and other articles of tangible personal property of
every kind and nature, and replacements thereof, owned by Grantor and
now or at any time hereafter affixed to the Improvements or the
Premises, including all pumps, tanks, machinery, apparatus equipment,
lifts (including fire sprinklers and alarm systems, fire prevention or
control systems, cleaning rigs, air conditioning, heating, boilers,
refrigerating, electronic monitoring, water, loading, unloading,
lighting, power, sanitation, waste removal, communications, partitions,
lighting fixtures, freezers, refrigerators, walk-in coolers, signs
(indoor and outdoor), and all other items of tangible personal property
of any kind affixed to the Improvements or the Premises, it being
understood that the enumeration of any specific articles of property
shall in no way result in or be held to exclude any items of property
not specifically mentioned (the property referred to in this
subparagraph (3), (the "Fixtures");
(4) all general intangibles owned by Grantor and relating to
design, development, operation, management and use of the Premises or
the Improvements, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents
obtained from and all materials prepared for filing or filed with any
governmental agency in connection with the development, use, operation
or management of the Premises and Improvements, all construction,
service, engineering, consulting, leasing, architectural and other
similar contracts concerning the design, construction, management,
operation, occupancy and/or use of the Premises and Improvements, all
architectural drawings, plans, specifications, soil tests, feasibility
studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Premises and
7
Improvements, and all payment and performance bonds or warranties or
guarantees relating to the Premises or the Improvements, all to the
extent assignable (the "Permits, Plans and Warranties");
(5) all now or hereafter existing leases or licenses (under which
Grantor is landlord or licensor) and subleases (under which Grantor is
sublandlord), concession, management, mineral or other agreements of a
similar kind that permit the use or occupancy of the Premises or the
Improvements for any purpose in return for any payment, or the
extraction or taking of any gas, oil, water or other minerals from the
Premises in return for payment of any fee, rent or royalty
(collectively, "Leases"), and all agreements or contracts for the
sale or other disposition of all or any part of the Premises or the
Improvements, now or hereafter entered into by Grantor, together with
all charges, fees, income, issues, profits, receipts, rents, revenues
or royalties payable thereunder ("Rents");
(6) all real estate tax refunds and all proceeds of the
conversion, voluntary or involuntary, of any of the Trust Property into
cash or liquidated claims ("Proceeds"), including Proceeds of
insurance maintained by the Grantor and condemnation awards, any awards
that may become due by reason of the taking by eminent domain or any
transfer in lieu thereof of the whole or any part of the Premises or
Improvements or any rights appurtenant thereto, and any awards for
change of grade of streets, together with any and all moneys now or
hereafter on deposit for the payment of real estate taxes, assessments
or common area charges levied against the Trust Property, unearned
premiums on policies of fire and other insurance maintained by the
Grantor covering any interest in the Trust Property or required by the
Senior Credit Agreement; and
(7) all extensions, improvements, betterments, renewals,
substitutes and replacements of and all additions and appurtenances to,
the Land, the Premises, the Improvements, the Fixtures, the Permits,
Plans and Warranties and the Leases, hereinafter acquired by or
released to the Grantor or constructed, assembled or placed by the
Grantor on the Land, the Premises or the Improvements, and all
conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or
conversion, as the case may be, and in each such case, without any
further mortgage, deed of trust, conveyance, assignment or other act by
8
the Grantor, all of which shall become subject to the lien of this
Second Priority Deed of Trust as fully and completely, and with the
same effect, as though now owned by the Grantor and specifically
described herein.
TO HAVE AND TO HOLD the Trust Property unto the Trustee, its successors
and assigns, for the ratable benefit of the Second Priority Debt Parties,
forever, subject only to the Permitted Encumbrances (as hereinafter defined) and
to satisfaction and cancelation as provided in Section 3.04 , IN TRUST
NEVERTHELESS, upon the terms and trust herein set forth for the benefit and
security of the Beneficiary.
ARTICLE I
Representations, Warranties and Covenants of Grantor
Grantor agrees, covenants, represents and/or warrants as follows:
SECTION 1.01. Title. (a) Grantor has good and marketable title to:
(i) an indefeasible fee estate in the Land and Improvements; and
(ii) all of the Fixtures;
subject only to (A) the Senior Deed of Trust, (B) liens, pledges, charges and
other encumbrances which are identified in Section 4.15(a) of the Senior Credit
Agreement and (C) minor defects in title that do not interfere with the ability
of Grantor or any other subsidiary of the Borrower to conduct its business as
presently conducted or to utilize the Trust Property for its intended purpose
(collectively, the "Permitted Encumbrances").
(b) There are no Leases affecting the Land or the Improvements except
as disclosed in the Second Priority Debt Documents.
(c) Grantor is not obligated under, and the Trust Property is not bound
by or subject to, any right, of first refusal, option or other contractual right
to sell, assign or otherwise dispose of any Trust Property or any interest
therein.
(d) The granting of this Second Priority Deed of Trust is within
Grantor's corporate powers and has been duly authorized by all necessary
9
corporate, and, if required, stockholder action. This Second Priority Deed of
Trust has been duly executed and delivered by Grantor and constitutes a legal,
valid and binding obligation of Grantor, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
(e) This Second Priority Deed of Trust, when duly recorded in the
appropriate public records and when financing statements are duly filed in the
appropriate public records, will create a valid, perfected and enforceable
first-priority lien upon and security interest in all the Trust Property subject
only to Permitted Encumbrances. As of the date hereof, there are no defenses or
offsets to this Second Priority Deed of Trust that will be asserted by Grantor
or its affiliates (or any third party defense or offset now known to Grantor or
its affiliates) or to any of the Second Priority Debt Obligations secured hereby
for so long as any portion of the Second Priority Debt Obligations remains
outstanding. Grantor will forever warrant and defend its title to the Trust
Property, the rights of Trustee and/or Beneficiary therein under this Second
Priority Deed of Trust and the validity and priority of the lien of this Second
Priority Deed of Trust against the claims of all persons and parties except
those having rights under Permitted Encumbrances, to the extent of those rights.
SECTION 1.02. Senior Loan Documents. The Grantor hereby covenants that
(i) the Grantor shall promptly pay when due and payable the principal, interest
and other charges mentioned in and made payable by the Senior Loan Documents;
(ii) the Grantor shall promptly perform and observe all of the terms, covenants
and conditions required to be performed and observed by the Grantor under the
Senior Loan Documents within the grace and cure periods provided in the Senior
Loan Documents; (iii) the Grantor shall notify the Trustee or Beneficiary (A)
promptly prior to the expiration of any applicable grace and cure period for
which provision is made in the Senior Loan Documents of any monetary default,
and (B) promptly after the expiration of any applicable grace and cure period
for which provision is made in the Senior Loan Documents of any non-monetary
default by the Grantor in the performance or observance of any of the terms,
covenants or conditions on the part of the Grantor to be performed or observed
under the Senior Loan Documents; and (iv) the Grantor shall (A) promptly notify
the Trustee or Beneficiary of the receipt by the Grantor of any notice from the
holders of the Senior Obligations asserting or claiming a default by the Grantor
10
in the performance or observance of any of the terms, covenants or conditions on
the part of the Grantor to be performed or observed under the Senior Loan
Documents, and (B) promptly cause a copy of each such notice to be delivered to
the Trustee or Beneficiary.
SECTION 1.03. Second Priority Debt Documents; Second Priority
Subsidiary Guarantee Agreement . (a) This Second Priority Deed of Trust is given
pursuant to the Second Priority Debt Documents and the Second Priority
Subsidiary Guarantee Agreement. Each and every term and provision of the Second
Priority Debt Documents and the Second Priority Subsidiary Guarantee Agreement
(excluding the governing law provisions thereof), including the rights,
remedies, obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties thereto shall be considered as if
a part of this Second Priority Deed of Trust.
(b) If Trustee or Beneficiary exercises any of its rights or remedies
under this Second Priority Deed of Trust, or if any actions or proceedings
(including any bankruptcy, insolvency or reorganization proceedings) are
commenced in which Trustee or Beneficiary is made a party and is obliged to
defend or uphold or enforce this Second Priority Deed of Trust or the rights of
Trustee or Beneficiary hereunder or the terms of any Lease, or if a condemnation
proceeding is instituted affecting the Trust Property, Grantor will pay all
reasonable sums, including reasonable attorneys' fees and disbursements,
incurred by Trustee or Beneficiary related to the exercise of any remedy or
right of Trustee or Beneficiary pursuant hereto and the reasonable expenses of
any such action or proceeding together with all statutory or other costs,
disbursements and allowances, interest thereon from the date of demand for
payment thereof at the lesser of (i) the rate per annum (computed on the basis
of the actual number of days elapsed over a year of 365 or 366 days, as the case
may be) equal to the sum of (A) the rate of interest publically announced by
Citibank in New York, New York, from time to time as its "base rate", plus (B)
2.00% and (ii) the rate which, together with all fees, charges and other amounts
which are treated as interest on such amounts under applicable law, constitutes
the maximum lawful rate which may be contracted for, charged, taken, received or
reserved by Trustee or Beneficiary in accordance with applicable law (the
"Default Interest Rate"), and such sums and the interest thereon shall, to the
extent permissible by law, be a lien on the Trust Property prior to any right,
title to, interest in or claim upon the Trust Property attached or accruing
subsequent to the recording of this Second Priority Deed of Trust and shall be
secured by this Second Priority Deed of Trust to the extent permitted by law.
Any payment of amounts due under this Second Priority Deed of Trust not made on
11
or before the due date for such payments shall accrue interest daily without
notice from the due date until paid at the Default Interest Rate, and such
interest at the Default Interest Rate shall be paid by Grantor to Trustee or
Beneficiary within 10 days after Mortgagor's receipt of notice from the Trustee
or Beneficiary that is due.
SECTION 1.04. Payment of Taxes, Liens and Charges. (a) Except to the
extent they are being contested in the manner permitted by the Second Priority
Debt Documents, Grantor will pay and discharge from time to time prior to the
time when the same shall become delinquent, and before any interest or penalty
accrues thereon or attaches thereto, (i) all taxes and assessments (general and
special), water and sewer rents and/or charges, public or private impositions,
levies, dues, permit, inspection and license fees, vault charges, service
charges, public or private common area charges or maintenance charges, utility
charges of every kind and nature which may become liens on the Trust Property
with priority over the lien of this Second Priority Deed of Trust and (ii) all
other material public or private charges, whether created or evidenced by
recorded or unrecorded documents or of a like or different nature, imposed upon
or assessed against the Trust Property or any part thereof or upon the Rents
from the Trust Property or arising in respect of the occupancy, use, operation
or possession thereof.
(b) In the event of the passage of any state, Federal, municipal or
other governmental law, order, rule or regulation subsequent to the date hereof
(i) deducting from the value of real property for the purpose of taxation any
lien or encumbrance thereon or in any manner changing or modifying the laws now
in force governing the taxation of this Second Priority Deed of Trust or debts
secured by mortgages or deeds of trust (other than laws governing income,
franchise and similar taxes generally) or the manner of collecting taxes thereon
and (ii) imposing a tax to be paid by Beneficiary, either directly or
indirectly, on this Second Priority Deed of Trust or any of the Senior Loan
Documents, or requiring an amount of taxes to be withheld or deducted therefrom,
Grantor will promptly notify Beneficiary of such event. In such event (A)
Grantor shall at the request of Beneficiary, execute an instrument or agreement
which obligates Grantor to make such additional payments as may be necessary to
place Grantor and the Second Priority Debt Parties in the same economic position
they would have been in with respect to the Senior Loans and other Second
Priority Debt Obligations if such law, order, rule or regulation had not been
passed and (B) Grantor shall make such additional payments.
12
(c) At any time that an Event of Default (as hereinafter defined) shall
occur and be continuing, or if required by any law applicable to Grantor or to
Beneficiary, Beneficiary shall have the right to direct Grantor to make an
initial deposit on account of real estate taxes and assessments, insurance
premiums and common area charges, levied against or payable in respect of the
Trust Property in advance and thereafter on a quarterly basis, each such deposit
to be equal to one-quarter of any such annual charges estimated in a reasonable
manner by Beneficiary in order to accumulate with Beneficiary sufficient funds
to pay such taxes, assessments, insurance premiums and charges. Any such
deposits held by Beneficiary shall be returned to Grantor within 30 days after
this Second Priority Deed of Trust is released or satisfied as provided in
Section 3.04.
SECTION 1.05. Payment of Closing Costs. Grantor shall pay all
reasonable costs incurred by or on behalf of the Beneficiary in connection with,
relating to or arising out of the preparation, execution and recording of this
Second Priority Deed of Trust, including title company charges, inspection
costs, recording fees and taxes, attorneys', engineers' and consultants' fees
and disbursements and all other, similar expenses of every kind.
SECTION 1.06. Plans; Alterations and Waste; Repairs. (a) To the extent
the same exist on the date hereof or are obtained in connection with future
permitted alterations, Grantor shall maintain a complete set of final plans,
specifications, blueprints and drawings for the Trust Property either at the
Trust Property or in a particular office at the headquarters of Grantor to which
Beneficiary shall have access upon reasonable advance notice and at reasonable
times.
(b) Grantor shall not:
(i) demolish or remove all or any material portion of the Improvements;
(ii) commit any waste on the Trust Property or make any alterations to
the Trust Property which would materially diminish the utility of Trust Property
in the conduct of the business of the Grantor or its affiliates as conducted
thereon on the date hereof;
(iii) change the use of the Trust Property or take any other action
with respect to the Trust Property if it would materially increase the risk of
fire or any other hazard or violate the terms of any insurance policy required
by Section 1.06 hereof; without the consent of the Beneficiary in each instance,
such consent not to be unreasonably withheld or delayed.
13
(c) Grantor will keep and maintain the Improvements and the Fixtures in
good repair, working order and condition, reasonable wear and tear excepted.
SECTION 1.07. Insurance. Grantor will purchase and maintain liability
insurance, insurance on the Improvements and Fixtures and other insurance in
accordance with the terms of the Second Priority Debt Documents.
SECTION 1.08. Casualty; Condemnation/Eminent Domain. Grantor shall give
Beneficiary prompt written notice of any casualty or other damage to the Trust
Property or any proceeding for the taking of the Trust Property or any portion
thereof or interest therein under power of eminent domain or by condemnation or
any similar proceeding. The proceeds received by or on behalf of the Grantor in
respect of any such casualty, damage or taking shall constitute trust funds held
by the Grantor for the benefit of the Second Priority Debt Parties to be applied
to in accordance with the terms of the Second Priority Debt Documents.
SECTION 1.09. Assignment of Leases and Rents. (a) Grantor hereby
irrevocably and absolutely grants, transfers and assigns all of its right title
and interest in all Leases, together with any and all extensions and renewals
thereof for purposes of securing and discharging the performance by Grantor of
the Second Priority Debt Obligations. Grantor has not assigned or executed any
assignment of, and will not assign or execute any assignment of, any other Lease
or their respective Rents to anyone other than Beneficiary.
(b) Without Beneficiary's prior written consent, which shall not be
unreasonably withheld or delayed, Grantor will not enter into, modify, amend,
terminate or consent to the cancelation or surrender of any Lease.
(c) Subject to Section 1.09(d), Grantor has assigned and transferred to
Beneficiary all of Grantor's right, title and interest in and to the Rents now
or hereafter arising from each Lease heretofore or hereafter made or agreed to
by Grantor, it being intended that this assignment establish, subject to Section
1.09(d), an absolute transfer and assignment of all Rents and all Leases to
Trustee for the benefit of the Beneficiary and not merely to grant a security
interest therein. Subject to Section 1.09(d), Beneficiary may in Grantor's name
and stead (with or without first taking possession of any of the Trust Property
personally or by receiver as provided herein) operate the Trust Property and
14
rent, lease or let all or any portion of any of the Trust Property to any party
or parties at such rental and upon such terms as Beneficiary shall, in its sole
discretion, determine, and may collect and have the benefit of all of said Rents
arising from or accruing at any time thereafter or that may thereafter become
due under any Lease.
(d) So long as an Event of Default shall not have occurred and be
continuing, Beneficiary will not exercise any of its rights under Section
1.09(c), and Grantor shall receive and collect the Rents accruing under any
Lease; but after the happening and during the continuance of any Event of
Default, Beneficiary may, at its option, receive and collect all Rents and enter
upon the Premises and Improvements through its officers, agents, employees or
attorneys for such purpose and for the operation and maintenance thereof.
Grantor hereby irrevocably authorizes and directs each tenant, if any, and each
successor, if any, to the interest of any tenant under any Lease, respectively,
to rely upon any notice of a claimed Event of Default sent by Beneficiary to any
such tenant or any of such tenant's successors in interest, and thereafter to
pay Rents to Beneficiary without any obligation or right to inquire as to
whether an Event of Default actually exists and even if some notice to the
contrary is received from the Grantor, who shall have no right or claim against
any such tenant or successor in interest for any such Rents so paid to
Beneficiary. Each tenant or any of such tenant's successors in interest from
whom Beneficiary or any officer, agent, attorney or employee of Beneficiary
shall have collected any Rents, shall be authorized to pay Rents to Grantor only
after such tenant or any of their successors in interest shall have received
written notice from Beneficiary that the Event of Default is no longer
continuing, unless and until a further notice of an Event of Default is given by
Beneficiary to such tenant or any of its successors in interest.
(e) Beneficiary will not become a mortgagee in possession so long as it
does not enter or take actual possession of the Trust Property. In addition,
Beneficiary shall not be responsible or liable for performing any of the
obligations of the landlord under any Lease, for any waste by any tenant, or
others, for any dangerous or defective conditions of any of the Trust Property,
for negligence in the management, upkeep, repair or control of any of the Trust
Property or any other act or omission by any other person.
(f) Grantor shall furnish to Beneficiary, within 45 days after a
request by Beneficiary to do so (but no more frequently than twice annually), a
written statement containing the names of all tenants, subtenants and
15
concessionaires of the Premises or Improvements, the terms of any Lease, the
space occupied and the rentals or license fees payable thereunder.
SECTION 1.10. Restrictions on Transfers and Encumbrances. Except as
expressly permitted by the Second Priority Debt Documents or this Second
Priority Deed of Trust, Grantor shall not directly or indirectly sell, convey,
alienate, assign, lease, sublease, license, mortgage, pledge, encumber or
otherwise transfer, create, consent to or suffer the creation of any lien,
charges or any form of encumbrance upon any interest in or any part of the Trust
Property, or be divested of its title to the Trust Property or any interest
therein in any manner or way, whether voluntarily or involuntarily (other than
resulting from a condemnation), or engage in any common, cooperative, joint,
time-sharing or other congregate ownership of all or part thereof.
SECTION 1.11. Security Agreement. This Second Priority Deed of Trust is
both a mortgage of real property and a grant of a security interest in personal
property, and shall constitute and serve as a "Security Agreement" within the
meaning of the uniform commercial code as adopted in the state wherein the
Premises are located ("UCC"). Grantor has hereby granted unto Beneficiary a
security interest in and to all the Trust Property described in this Second
Priority Deed of Trust that is not real property, and simultaneously with the
recording of this Second Priority Deed of Trust, Grantor has filed or will file
UCC financing statements, and will file continuation statements prior to the
lapse thereof, at the appropriate offices in the state in which the Premises are
located to perfect the security interest granted by this Second Priority Deed of
Trust in all the Trust Property that is not real property. Grantor hereby
appoints Beneficiary as its true and lawful attorney-in-fact and agent, for
Grantor and in its name, place and stead, in any and all capacities, to execute
any document and to file the same in the appropriate offices (to the extent it
may lawfully do so), and to perform each and every act and thing reasonably
requisite and necessary to be done to perfect the security interest contemplated
by the preceding sentence. Beneficiary shall have all rights with respect to the
part of the Trust Property that is the subject of a security interest afforded
by the UCC in addition to, but not in limitation of, the other rights afforded
Beneficiary hereunder and under the Security Agreement.
SECTION 1.12. Filing and Recording. Grantor will cause this Second
Priority Deed of Trust, any other security instrument creating a security
interest in or evidencing the lien hereof upon the Trust Property and each
instrument of further assurance to be filed, registered or recorded in such
16
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien hereof upon, and the
security interest of Beneficiary in, the Trust Property. Grantor will pay all
filing, registration and recording fees, all Federal, state, county and
municipal recording, documentary or intangible taxes and other taxes, duties,
imposts, assessments and charges, and all reasonable expenses incidental to or
arising out of or in connection with the execution, delivery and recording of
this Second Priority Deed of Trust, any mortgage supplemental hereto, any
security instrument with respect to the Fixtures or any instrument of further
assurance.
SECTION 1.13. Further Assurances. Upon demand by Beneficiary, Grantor
will, at the cost of Grantor and without expense to Beneficiary, do, execute,
acknowledge and deliver all such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances as Beneficiary
shall from time to time reasonably require for the better conveying, assigning,
transferring and confirming unto Beneficiary the property and rights hereby
conveyed or assigned or intended now or hereafter so to be, or which Grantor may
be or may hereafter become bound to convey or assign to Beneficiary, or for
carrying out the intention or facilitating the performance of the terms of this
Second Priority Deed of Trust, or for filing, registering or recording this
Second Priority Deed of Trust, and on demand, Grantor will also execute and
deliver and hereby appoints Beneficiary as its true and lawful attorney-in-fact
and agent, for Grantor and in its name, place and stead, in any and all
capacities, to execute and file to the extent it may lawfully do so, one or more
financing statements, chattel mortgages or comparable security instruments
reasonably requested by Beneficiary to evidence more effectively the lien hereof
upon the Fixtures and to perform each and every act and thing requisite and
necessary to be done to accomplish the same.
SECTION 1.14. Additions to Trust Property. All right, title and
interest of Grantor in and to all extensions, improvements, betterments,
renewals, substitutes and replacements of, and all additions and appurtenances
to, the Trust Property hereafter acquired by or released to Grantor or
constructed, assembled or placed by Grantor upon the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case without any further
mortgage, conveyance, assignment or other act by Grantor, shall become subject
to the lien and security interest of this Second Priority Deed of Trust as fully
and completely and with the same effect as though now owned by Grantor and
17
specifically described in the grant of the Trust Property above, but at any and
all times Grantor will execute and deliver to Beneficiary any and all such
further assurances, mortgages, conveyances or assignments thereof as Beneficiary
may reasonably require for the purpose of expressly and specifically subjecting
the same to the lien and security interest of this Second Priority Deed of
Trust.
SECTION 1.15. No Claims Against Trustee or Beneficiary. Nothing
contained in this Second Priority Deed of Trust shall constitute any consent or
request by Beneficiary (or Trustee), express or implied, for the performance of
any labor or services or the furnishing of any materials or other property in
respect of the Trust Property or any part thereof, nor as giving Grantor any
right, power or authority to contract for or permit the performance of any labor
or services or the furnishing of any materials or other property in such fashion
as would permit the making of any claim against Beneficiary (or Trustee) in
respect thereof.
SECTION 1.16. Fixture Filing. Certain portions of the Trust Property
are or will become "fixtures" (as that term is defined in the UCC) on the Land,
and this Second Priority Deed of Trust, upon being filed for record in the real
estate records of the county wherein such fixtures are situated, shall operate
also as a financing statement filed as a fixture filing in accordance with the
applicable provisions of said UCC upon such portions of the Trust Property that
are or become fixtures. The addresses of the Grantor, as debtor, and
Beneficiary, as secured party, are set forth in the first page of this Second
Priority Deed of Trust.
SECTION 1.17. Notice Regarding Special Flood Hazard s. Beneficiary has
informed Grantor, and Grantor hereby acknowledges that it realizes, that the
Premises listed on Exhibit B is in an area identified by the Director of the
Federal Emergency Management Agency as a "special flood hazard area" described
in 12 C.F.R. ss.22.2, and Grantor hereby acknowledges that it has received,
prior to the making of the Senior Loans and the incurrence of indebtedness
constituting part of the Senior Obligations, the notice regarding Federal
disaster relief assistance referred to in the Appendix to 12 C.F.R. Part 22.
18
ARTICLE II
Defaults and Remedies
SECTION 2.01. Events of Default. Any event of default under the Second
Priority Debt Documents (as such term is defined therein, an "Event of Default")
shall constitute an Event of Default under this Second Priority Deed of Trust.
SECTION 2.02. Demand for Payment. If an Event of Default shall occur
and be continuing, then, without requirement of protest, demand or notice of
Beneficiary, Grantor will pay to Beneficiary all amounts due hereunder and under
the Second Priority Debt Documents and such further amount as shall be
sufficient to cover the costs and expenses of collection, including attorneys'
fees, disbursements and expenses incurred by Beneficiary, and Beneficiary shall
be entitled and empowered to institute an action or proceedings at law or in
equity for the collection of the sums so due and unpaid, to prosecute any such
action or proceedings to judgment or final decree, to enforce any such judgment
or final decree against Grantor and to collect, in any manner provided by law,
all moneys adjudged or decreed to be payable.
SECTION 2.03. Rights To Take Possession, Operate and Apply Revenues.
(a) If an Event of Default shall occur and be continuing, Grantor shall, upon
written demand of Beneficiary, forthwith surrender to Beneficiary actual
possession of the Trust Property and, if and to the extent not prohibited by
applicable law, Beneficiary itself, or by such officers or agents as it may
appoint, may then enter and take possession of all the Trust Property without
the appointment of a receiver or an application therefor, and exclude Grantor
and its agents and employees wholly therefrom.
(b) If Grantor shall for any reason fail to surrender or deliver the
Trust Property or any part thereof after such demand by Beneficiary, Beneficiary
may to the extent not prohibited by applicable law, obtain a judgment or decree
conferring upon Beneficiary the right to immediate possession or requiring
Grantor to deliver immediate possession of the Trust Property to Beneficiary, to
the entry of which judgment or decree Grantor hereby specifically consents.
Grantor will pay to Beneficiary, upon demand, all reasonable expenses of
obtaining such judgment or decree, including reasonable compensation to
Beneficiary's attorneys and agents with interest thereon at the Default Interest
Rate; and all such expenses and compensation shall, until paid, be secured by
this Second Priority Deed of Trust.
19
(c) Upon every such entry or taking of possession, Beneficiary may, to
the extent not prohibited by applicable law, hold, store, use, operate, manage
and control the Trust Property, conduct the business thereof and, from time to
time, (i) make all necessary and proper maintenance, repairs, renewals,
replacements, additions, betterments and improvements thereto and thereon, (ii)
purchase or otherwise acquire additional fixtures, personalty and other
property, (iii) insure or keep the Trust Property insured, (iv) manage and
operate the Trust Property and exercise all the rights and powers of Grantor to
the same extent as Grantor could in its own name or otherwise with respect to
the same, or (v) enter into any and all agreements with respect to the exercise
by others of any of the powers herein granted Beneficiary, all as may from time
to time be directed or determined by Beneficiary to be in its best interest and
Grantor hereby appoints Beneficiary as its true and lawful attorney-in-fact and
agent, for Grantor and in its name, place and stead, in any and all capacities,
to perform any of the foregoing acts. Beneficiary may collect and receive all
the Rents, issues, profits and revenues from the Trust Property, including those
past due as well as those accruing thereafter, and, after deducting (i) all
expenses of taking, holding, managing and operating the Trust Property
(including compensation for the services of all persons employed for such
purposes), (ii) the costs of all such maintenance, repairs, renewals,
replacements, additions, betterments, improvements, purchases and acquisitions,
(iii) the costs of insurance, (iv) such taxes, assessments and other similar
charges as Beneficiary may at its option pay, (v) other proper charges upon the
Trust Property or any part thereof and (vi) the compensation, expenses and
disbursements of the attorneys and agents of Beneficiary, Beneficiary shall
apply the remainder of the moneys and proceeds so received as provided in
Section 2.08.
(d) Whenever, before any sale of the Trust Property under Section 2.06,
all Second Priority Debt Obligations that are then due shall have been paid and
all Events of Default fully cured, Beneficiary will surrender possession of the
Trust Property back to Grantor, its successors or assigns. The same right of
taking possession shall, however, arise again if any subsequent Event of Default
shall occur and be continuing.
SECTION 2.04. Right To Cure Grantor's Failure to Perform. Should
Grantor fail in the payment, performance or observance of any term, covenant or
condition set forth in this Second Priority Deed of Trust or the Second Priority
Debt Documents (with respect to the Trust Property) for 10 days after notice of
such failure from Beneficiary (in the case of a monetary default) or 20 days
20
after notice of such failure from Beneficiary (in the case of a non-monetary
default), Beneficiary may pay, perform or observe the same, and all payments
made or costs or expenses incurred by Beneficiary in connection therewith shall
be secured hereby and shall be repaid by Grantor to Beneficiary with interest
thereon at the Default Interest Rate from the date incurred within 10 days after
demand made by Beneficiary. Beneficiary shall be the judge using reasonable
discretion of the necessity for any such actions and of the amounts to be paid.
Subject to the provisions of the Collateral Trust and Intercreditor Agreement,
Beneficiary is hereby empowered to enter and to authorize others to enter upon
the Premises or the Improvements or any part thereof for the purpose of
performing or observing any such defaulted term, covenant or condition without
having any obligation to so perform or observe and without thereby becoming
liable to Grantor, to any person in possession holding under Grantor or to any
other person.
SECTION 2.05. Right to a Receiver. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, of an Event of Default shall occur
and be continuing, Beneficiary, upon application to a court of competent
jurisdiction, shall be entitled as a matter of right to the appointment of a
receiver (which may be Beneficiary or an employee of Beneficiary or Trustee) to
take possession of and to operate the Trust Property and to collect and apply
the Rents. The receiver shall have all of the rights and powers permitted under
the laws of the state wherein the Trust Property is located. Grantor shall pay
to Beneficiary upon demand all reasonable expenses, including receiver's fees,
reasonable attorney's fees and disbursements, costs and agent's compensation
incurred pursuant to the provisions of this Section 2.05; and all such expenses
shall be secured by this Second Priority Deed of Trust and shall be, without
demand, immediately repaid by Grantor to Beneficiary with interest thereon at
the Default Interest Rate.
SECTION 2.06. Foreclosure and Sale. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, (a) if an Event of Default shall
occur and be continuing, Beneficiary may elect to sell the Trust Property or any
part of the Trust Property by exercise of the power of foreclosure or of sale
granted to Beneficiary and/or Trustee by applicable law or this Second Priority
Deed of Trust. In such case, Beneficiary or Trustee may commence a civil action
to foreclose this Second Priority Deed of Trust, or it may proceed and sell the
Trust Property to satisfy any Second Priority Debt Obligation. Trustee or
Beneficiary or an officer appointed by a judgment of foreclosure to sell the
Trust Property, may sell all or such parts of the Trust Property as may be
chosen by Trustee or Beneficiary at the time and place of sale fixed by it in a
21
notice of sale, either as a whole or in separate lots, parcels or items as
Trustee or Beneficiary shall deem expedient, and in such order as it may
determine, at public auction to the highest bidder. Trustee or Beneficiary or an
officer appointed by a judgment of foreclosure to sell the Trust Property may
postpone any fore- closure or other sale of all or any portion of the Trust
Property by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement or subsequently
noticed sale. Without further notice, Trustee or Beneficiary or an officer
appointed to sell the Trust Property may make such sale at the time fixed by the
last postponement, or may, in its discretion, give a new notice of sale. Any
person, including Grantor or Trustee or Beneficiary or any designee or affiliate
thereof, may purchase at such sale.
(b) The Trust Property may be sold subject to unpaid taxes and
Permitted Encumbrances, and, after deducting all costs, fees and expenses of
Trustee or Beneficiary (including costs of evidence of title in connection with
the sale), Trustee or Beneficiary or an officer that makes any sale shall apply
the proceeds of sale in the manner set forth in Section 2.08.
(c) Any foreclosure or other sale of less than the whole of the Trust
Property or any defective or irregular sale made hereunder shall not exhaust the
power of foreclosure or of sale provided for herein; and subsequent sales may be
made hereunder until the Second Priority Debt Obligations have been satisfied,
or the entirety of the Trust Property has been sold.
(d) If an Event of Default shall occur and be continuing, Beneficiary
may instead of, or in addition to, exercising the rights described in Section
2.06(a) above and either with or without entry or taking possession as herein
permitted, proceed by a suit or suits in law or in equity or by any other
appropriate proceeding or remedy (i) to specifically enforce payment of some or
all of the Second Priority Debt Obligations, or the performance of any term,
covenant, condition or agreement of this Second Priority Deed of Trust or any
other Senior Loan Document or any other right, or (ii) to pursue any other
remedy available to Beneficiary, all as Beneficiary shall determine most
effectual for such purposes.
SECTION 2.07. Other Remedies. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, (a) in case an Event of Default
shall occur and be continuing, Beneficiary may also exercise, to the extent not
prohibited by law, any or all of the remedies available to a secured party under
the UCC.
22
(b) In connection with a sale of the Trust Property or any Fixtures and
the application of the proceeds of sale as provided in Section 2.08, Beneficiary
shall be entitled to enforce payment of and to receive up to the principal
amount of the Second Priority Debt Obligations, plus all other charges, payments
and costs due under this Second Priority Deed of Trust, and to recover a
deficiency judgment for any portion of the aggregate principal amount of the
Second Priority Debt Obligations remaining unpaid, with interest.
SECTION 2.08. Application of Sale Proceeds and Rents. After any
foreclosure sale of all or any portion of the Trust Property, Beneficiary shall
receive and apply the proceeds of the sale together with any Rents that may have
been collected and any other sums that may then be held by Trustee or
Beneficiary under this Second Priority Deed of Trust as follows:
FIRST, to the payment of the costs and expenses of such sale,
including compensation to Trustee's and Beneficiary's attorneys and
agents, and of any judicial proceedings wherein the same may be made,
and of all expenses, liabilities and advances made or incurred by
Trustee and Beneficiary under this Second Priority Deed of Trust,
together with interest at the Default Interest Rate on all advances
made by Trustee and Beneficiary, including all taxes, assessments (or
other charges) (except any taxes, assessments or other charges subject
to which the Trust Property shall have been sold) and the cost of
removing any liens or encumbrances (except any liens or encumbrances
subject to which the Trust Property was sold);
SECOND, to the Beneficiary for the distribution to the Second
Priority Debt Parties for the satisfaction of the Second Priority Debt
Obligations owed to the Second Priority Debt Parties; and
THIRD, to the Grantor, its successors or assigns, or as a court
of competent jurisdiction may otherwise direct.
The Beneficiary shall have absolute discretion as to the time of application of
any such proceeds, moneys or balances in accordance with this Second Priority
Deed of Trust. In the event of any inconsistency between this Section 2.08 and
the Collateral Trust and Intercreditor Agreement, the Collateral Trust and
Intercreditor Agreement shall control. Upon any sale of the
23
Trust Property by the Trustee or Beneficiary (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
Trustee or Beneficiary or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Trust Property so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Trustee or Beneficiary or such
officer or be answerable in any way for the misapplication thereof.
SECTION 2.09. Grantor as Tenant Holding Over. If Grantor remains in
possession of any of the Trust Property after any foreclosure sale by Trustee or
Beneficiary, at Beneficiary's election Grantor shall be deemed a tenant holding
over and shall forthwith surrender possession to the purchaser or purchasers at
such sale or be summarily dispossessed or evicted according to provisions of law
applicable to tenants holding over.
SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws. Grantor waives, to the extent not prohibited by law, (i) the
benefit of all laws now existing or that hereafter may be enacted (x) providing
for any appraisement or valuation of any portion of the Trust Property and/or
(y) in any way extending the time for the enforcement or the collection of
amounts due under any of the Second Priority Debt Obligations or creating or
extending a period of redemption from any sale made in collecting said debt or
any other amounts due Beneficiary, (ii) any right to at any time insist upon,
plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any homestead exemption, stay, statute of limitations,
extension or redemption, or sale of the Trust Property as separate tracts, units
or estates or as a single parcel in the event of foreclosure or notice of
deficiency, and (iii) all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the whole of or each of
the Second Priority Debt Obligations and marshaling in the event of foreclosure
of this Second Priority Deed of Trust.
SECTION 2.11. Discontinuance of Proceedings. In case Trustee or
Beneficiary shall proceed to enforce any right, power or remedy under this
Second Priority Deed of Trust by foreclosure, entry or otherwise, and such
proceedings shall be discontinued or abandoned for any reason, or shall be
determined adversely to Trustee or Beneficiary, then and in every such case
Grantor and Trustee and Beneficiary shall be restored to their former positions
and rights hereunder, and all rights, powers and remedies of Trustee and
Beneficiary shall continue as if no such proceeding had been taken.
24
SECTION 2.12. Suits To Protect the Trust Property. Beneficiary shall
have power (a) to institute and maintain suits and proceedings to prevent any
impairment of the Trust Property by any acts that may be unlawful or in
violation of this Second Priority Deed of Trust, (b) to preserve or protect its
interest in the Trust Property and in the Rents arising therefrom and (c) to
restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of or compliance with such enactment, rule or order
would impair the security or be prejudicial to the interest of Beneficiary
hereunder.
SECTION 2.13. Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting Grantor, Beneficiary shall, to the extent permitted
by law, be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of Beneficiary allowed in
such proceedings for the Second Priority Debt Obligations secured by this Second
Priority Deed of Trust at the date of the institution of such proceedings and
for any interest accrued, late charges and additional interest or other amounts
due or that may become due and payable hereunder after such date.
SECTION 2.14. Possession by Beneficiary. Notwithstanding the
appointment of any receiver, liquidator or trustee of Grantor, any of its
property or the Trust Property, Beneficiary shall be entitled, to the extent not
prohibited by law, to remain in possession and control of all parts of the Trust
Property now or hereafter granted under this Second Priority Deed of Trust to
Beneficiary in accordance with the terms hereof and applicable law.
SECTION 2.15. Waiver. (a) No delay or failure by Beneficiary to
exercise any right, power or remedy accruing upon any breach or Event of Default
shall exhaust or impair any such right, power or remedy or be construed to be a
waiver of any such breach or Event of Default or acquiescence therein; and every
right, power and remedy given by this Second Priority Deed of Trust to
Beneficiary may be exercised from time to time and as often as may be deemed
expedient by Beneficiary. No consent or waiver by Beneficiary to or of any
breach or Event of Default by Grantor in the performance of the Second Priority
Debt Obligations shall be deemed or construed to be a consent or waiver to or of
any other breach or Event of Default in the performance of the same or of any
25
other Second Priority Debt Obligations by Grantor hereunder. No failure on the
part of Beneficiary to complain of any act or failure to act or to declare an
Event of Default, irrespective of how long such failure continues, shall
constitute a waiver by Beneficiary of its rights hereunder or impair any rights,
powers or remedies consequent on any future Event of Default by Grantor.
(b) Even if Beneficiary (i) grants some forbearance or an extension of
time for the payment of any sums secured hereby, (ii) takes other or additional
security for the payment of any sums secured hereby, (iii) waives or does not
exercise some right granted herein or under the Second Priority Debt Documents,
(iv) releases a part of the Trust Property from this Second Priority Deed of
Trust, (v) agrees to change some of the terms, covenants, conditions or agree-
ments of any of the Second Priority Debt Documents, (vi) consents to the filing
of a map, plat or replat affecting the Premises, (vii) consents to the granting
of an easement or other right affecting the Premises or (viii) makes or consents
to an agreement subordinating Beneficiary's lien on the Trust Property
hereunder; no such act or omission shall preclude Beneficiary from exercising
any other right, power or privilege herein granted or intended to be granted in
the event of any breach or Event of Default then made or of any subsequent
default; nor, except as otherwise expressly provided in an instrument executed
by Beneficiary, shall this Second Priority Deed of Trust be altered thereby. In
the event of the sale or transfer by operation of law or otherwise of all or
part of the Trust Property, Beneficiary is hereby authorized and empowered to
deal with any vendee or transferee with reference to the Trust Property secured
hereby, or with reference to any of the terms, covenants, conditions or
agreements hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any
liabilities, obligations or undertakings.
SECTION 2.16. Remedies Cumulative. No right, power or remedy conferred
upon or reserved to Trustee or Beneficiary by this Second Priority Deed of Trust
is intended to be exclusive of any other right, power or remedy, and each and
every such right, power and remedy shall be cumulative and concurrent and in
addition to any other right, power and remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
26
ARTICLE III
Miscellaneous
SECTION 3.01. Partial Invalidity. In the event any one or more of the
provisions contained in this Second Priority Deed of Trust shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such validity,
illegality or unenforceability shall, at the option of Beneficiary, not affect
any other provision of this Second Priority Deed of Trust, and this Second
Priority Deed of Trust shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein.
SECTION 3.02. Notices. All notices, requests, demands and other
communications to any party hereunder shall be in writing (including bank wire,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Trustee or Beneficiary, at its address at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000 or facsimile number
(000) 000-0000 and (y) in the case of the Grantor, at the addresses, in care of
Rite Aid Corporation, 00 Xxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxxxx 00000 or facsimile
number (000) 000-0000. Each such notice, request or other communication shall be
effective if given by facsimile, which such communication is transmitted to the
facsimile number specified in this Section and confirmation of receipt is
received, if given by mail, 72 hours after such communication is deposited in
the mails with first class postage prepaid, addressed as aforesaid or if given
by any other means, when delivered at the addressed specified in this Section.
SECTION 3.03. Successors and Assigns. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the permitted
successors and assigns of Grantor and the successors and assigns of Beneficiary.
SECTION 3.04. Satisfaction and Cancelation. (a) The conveyance to
Trustee or Beneficiary of the Trust Property as security created and consummated
by this Second Priority Deed of Trust shall be null and void when all the Second
Priority Debt Obligations have been indefeasibly paid in full in accordance with
the terms of the Second Priority Debt Documents and no further Second Priority
Debt Obligations are outstanding.
27
(b) Upon a sale or financing by Grantor of all or any portion of the
Trust Property that is permitted by the Senior Loan Documents and the Second
Priority Debt Documents and the application of the Net Proceeds of such sale or
financing in accordance with the Collateral Trust and Intercreditor Agreement or
Second Priority Debt Documents, as applicable, the lien of this Second Priority
Deed of Trust shall be released from the applicable portion of the Trust
Property. Grantor shall give the Beneficiary reasonable written notice of any
sale or financing of the Trust Property prior to the closing of such sale or
financing.
(c) In connection with any termination or release pursuant to paragraph
(a), the Second Priority Deed of Trust shall be marked "satisfied" by the
Beneficiary, and this Second Priority Deed of Trust shall be canceled of record
at the request and at the expense of the Grantor. Beneficiary shall execute any
documents reasonably requested by Grantor to accomplish the foregoing or to
accomplish any release contemplated by this Section 3.04 and Grantor will pay
all costs and expenses, including reasonable attorneys' fees, disbursements and
other charges, incurred by Beneficiary in connection with the preparation and
execution of such documents.
SECTION 3.05. Definitions. As used in this Second Priority Deed of
Trust, the singular shall include the plural as the context requires and the
following words and phrases shall have the following meanings: (a) "including"
shall mean "including but not limited to"; (b) "provisions" shall mean
"provisions, terms, covenants and/or conditions"; (c) "lien" shall mean "lien,
charge, encumbrance, security interest, mortgage or deed of trust"; (d)
"obligation" shall mean "obligation, duty, covenant and/or condition"; (e)
"Trustee" shall mean "Trustee, for the benefit of the Beneficiary and in
accordance with the Second Priority Debt Documents,"; and (f) "any of the Trust
Property" shall mean "the Trust Property or any part thereof or interest
therein". Any act that Trustee or Beneficiary is permitted to perform hereunder
may be performed at any time and from time to time by Trustee or Beneficiary or
any person or entity designated by Beneficiary. Any act that is prohibited to
Grantor hereunder is also prohibited to all lessees of any of the Trust
Property, except to the extent that a Lease executed prior to the date hereof
expressly permits such act without the consent of the Grantor or the holder of
any mortgage or deed of trust. Each appointment of Beneficiary as
attorney-in-fact for Grantor under this Second Priority Deed of Trust is
irrevocable, with power of substitution and coupled with an interest. Subject to
the express provisions to the contrary contained in this Second Priority Deed of
Trust, Beneficiary has the right to refuse to grant its consent, approval or
28
acceptance or to indicate its satisfaction, in its sole discretion, whenever
such consent, approval, acceptance or satisfaction is required hereunder. To the
extent that this Second Priority Deed of Trust provides that any particular
consent, approval, acceptance or satisfaction is subject to the terms of the
Second Priority Debt Documents, it shall be granted or withheld as provided in
the Second Priority Debt Documents.
SECTION 3.06. Rules of Interpretation. References in this Second
Priority Deed of Trust to "Articles", "Sections", "Schedules" or "Exhibits"
shall be to Articles, Sections, Schedules or Exhibits of or to this Second
Priority Deed of Trust unless otherwise specifically provided. Any defined terms
may, unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Writing", "written" and comparable terms refer to
printing, typing and other means of reproducing words in a visible form.
References to any agreement or contract are to such agreement or contract as
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof. References to any Person include the successors and assigns
of such Person. References "from" or "through" any date mean, unless otherwise
specified, "from and including" or "through and including" respectively.
SECTION 3.07. Multisite Real Estate Transaction. Grantor acknowledges
that this Second Priority Deed of Trust is one of a number of Other Deeds of
Trust that secure the Second Priority Debt Obligations. Grantor agrees that the
lien of this Second Priority Deed of Trust shall be absolute and unconditional
and shall not in any manner be affected or impaired by any acts or omissions
whatsoever of Beneficiary, and without limiting the generality of the foregoing,
the lien hereof shall not be impaired by any acceptance by the Beneficiary of
any security for or guarantees of any of the Second Priority Debt Obligations
hereby secured, or by any failure, neglect or omission on the part of
Beneficiary to realize upon or protect any Second Priority Debt Obligation or
indebtedness hereby secured or any collateral security therefor including the
Other Deeds of Trust and other Second Priority Debt Documents. The lien hereof
shall not in any manner be impaired or affected by any release (except as to the
property released), sale, pledge, surrender, compromise, settlement, renewal,
extension, indulgence, alteration, changing, modification or disposition of any
of the Second Priority Debt Obligations secured or of any of the collateral
security therefor, including the Other Deeds of Trust and other Second Priority
Debt Documents or of any guarantee thereof, and Beneficiary may at its
discretion foreclose, exercise any power of sale, or exercise any other remedy
29
available to it under any or all of the Other Deeds of Trust and other Second
Priority Debt Documents without first exercising or enforcing any of its rights
and remedies hereunder. Such exercise of Beneficiary's rights and remedies under
any or all of the Other Deeds of Trust and other Second Priority Debt Documents
shall not in any manner impair the indebtedness hereby secured or the lien of
this Second Priority Deed of Trust and any exercise of the rights or remedies of
Beneficiary hereunder shall not impair the lien of any of the Other Deeds of
Trust and other Second Priority Debt Documents or any of Beneficiary's rights
and remedies thereunder. Grantor specifically consents and agrees that
Beneficiary may exercise its rights and remedies hereunder and under the Other
Deeds of Trust and other Second Priority Debt Documents separately or
concurrently and in any order that it may deem appropriate and waives any rights
of subrogation.
SECTION 3.08. Subordination; Intercreditor Agreement. The lien of this
Second Priority Deed of Trust is junior and subordinate to the lien of any Deed
of Trust now or hereafter granted to Citicorp USA, Inc. and its successors and
assigns as collateral agent for certain secured parties, including the lenders
from time to time part to that certain Senior Credit Agreement dated as of the
date hereof, as amended, replaced or refinanced from time to time, with Rite Aid
Corporation and its successors and assigns in accordance with the provisions of
the Collateral Trust and Intercreditor Agreement.
SECTION 3.09. Collateral Trust and Intercreditor Agreement.
Notwithstanding any provision to the contrary contained herein, the terms of
this Second Priority Deed of Trust, the Liens created hereby, and the rights and
remedies of the Second Priority Collateral Trustee and the Second Priority Debt
Parties hereunder, are subject to the Collateral Trust and Intercreditor
Agreement.
SECTION 3.10. Amendments in Writing. None of the terms or provisions
of this Second Priority Deed of Trust may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Grantor and
the Second Priority Collateral Trustee with the written consent of the Second
Priority Instructing Group, provided that (i) any provision of this Second
Priority Deed of Trust may be waived by the Second Priority Instructing Group
and (ii) any amendment, waiver, supplement or other modification which by its
terms adversely affects the rights of the Second Priority Debt Parties under a
particular Second Priority Facility in a manner different from its effect on the
other Second Priority Facilities shall only be effective with the consent of the
Second Priority Representative for each Second Priority Facility so adversely
affected.
30
ARTICLE IV
Particular Provisions
This Second Priority Deed of Trust is subject to the following
provisions relating to the particular laws of the state wherein the Premises are
located:
SECTION 4.01. Applicable Law; Certain Particular Provisions. This
Second Priority Deed of Trust shall be governed by and construed in accordance
with the internal law of the State in which the Trust Property is located
without regard to principles of conflicts of laws and Grantor and Beneficiary
agree to submit to jurisdiction and the laying of venue for any suit on this
Second Priority Deed of Trust in such state, except that the internal laws of
the State of New York (without regard to principles of conflicts of laws) shall
govern (i) those terms and conditions contained in the Second Priority Debt
Documents and/or the Second Priority Subsidiary Guarantee Agreement which are
incorporated by reference herein and (ii) the resolution of issues arising under
the Second Priority Debt Documents and/or the Second Priority Subsidiary
Guarantee Agreement to the extent that such resolution is necessary to the
interpretation of this Second Priority Deed of Trust. The terms and provisions
set forth in Appendix A attached hereto are hereby incorporated by reference as
though fully set forth herein. In the event of any conflict between the terms
and provisions contained in the body of this Second Priority Deed of Trust and
the terms and provisions set forth in Appendix A, the terms and provisions set
forth in Appendix A shall govern and control.
SECTION 4.02 Trustee's Powers and Liabilities. (a) Trustee, by
acceptance hereof, covenants faithfully to perform and fulfill the trusts herein
created, being liable, however, only for gross negligence, bad faith or wilful
misconduct, and hereby waives any statutory fee and agrees to accept reasonable
compensation, in lieu thereof, for any services rendered by it in accordance
with the terms hereof. All authorities, powers and discretions given in this
Second Priority Deed of Trust to Trustee and/or Beneficiary may be exercised by
either, without the other, with the same effect as if exercised jointly.
(b) Trustee may resign at any time upon giving 30 days' notice in
writing to Grantor and to Beneficiary.
(c) Beneficiary may remove Trustee at any time or from time to time and
select a successor trustee. In the event of the death, removal, resignation,
31
refusal to act, inability to act or absence of Trustee from the state in which
the premises are located, or in its sole discretion for any reason whatsoever,
Beneficiary may, upon notice to the Grantor and without specifying the reason
therefor and without applying to any court, select and appoint a successor
trustee, and all powers, rights, duties and authority of the former trustee, as
aforesaid, shall thereupon become vested in such successor. Such substitute
trustee shall not be required to give bond for the faithful performance of his
duties unless required by Beneficiary. Such substitute trustee shall be
appointed by written instrument duly recorded in the county where the Land is
located. Grantor hereby ratifies and confirms any and all acts that the herein
named Trustee, or his successor or successors in this trust, shall do lawfully
by virtue hereof. Grantor hereby agrees, on behalf of itself and its heirs,
executors, administrators and assigns, that the recitals contained in any deed
or deeds executed in due form by any Trustee or substitute trustee, acting under
the provisions of this instrument, shall be prima facie evidence of the facts
recited, and that it shall not be necessary to prove in any court, otherwise
than by such recitals, the existence of the facts essential to authorize the
execution and delivery of such deed or deeds and the passing of title thereby.
(d) Trustee shall not be required to see that this Second Priority Deed
of Trust is recorded, nor liable for its validity or its priority as a first
deed of trust, or otherwise, nor shall Trustee be answerable or responsible for
performance or observance of the covenants and agreements imposed upon Grantor
or Beneficiary by this Second Priority Deed of Trust or any other agreement.
Trustee, as well as Beneficiary, shall have authority in their respective
discretion to employ agents and attorneys in the execution of this trust and to
protect the interest of the Beneficiary hereunder, and to the extent permitted
by law they shall be compensated and all expenses relating to the employment of
such agents and/or attorneys, including expenses of litigations, shall be paid
out of the proceeds of the sale of the Trust Property conveyed hereby should a
sale be had, but if no such sale be had, all sums so paid out shall be
recoverable to the extent permitted by law by all remedies at law or in equity.
(e) At any time, or from time to time, without liability therefor and
with 10 days' prior written notice to Grantor, upon written request of
Beneficiary and without affecting the effect of this Second Priority Deed of
Trust upon the remainder of the Trust Property, Trustee may (i) reconvey any
part of the Trust Property, (ii) consent in writing to the making of any map or
plat thereof, so long as Grantor has consented thereto, (iii) join in granting
32
any easement thereon, so long as Grantor has consented thereto, or (iv) join in
any extension agreement or any agreement subordinating the lien or charge
hereof.
[The balance of this page intentionally left blank.]
33
IN WITNESS WHEREOF, this Second Priority Deed of Trust has been duly
executed and delivered to Trustee and Beneficiary by Grantor on the date of the
acknowledgment attached hereto.
THRIFTY PAYLESS, INC., a
California corporation
by:___________________________
Name:
Title:
Attest:
by:____________________________
Name:
Title:
34
[NEED LOCAL FORM OF ACKNOWLEDGMENT]
Exhibit A
to Second Priority Deed of Trust
Description of Land
All that real property situated in the County of Yolo, State of California,
described as follows:
PARCEL ONE:
That portion of the Northwest 1/4 of Section 27, Township 10 North, Range 2
East, M.D.B. & M., according to the official plat thereof, lying Easterly of the
following described line:
Beginning at a point on the North line of said Northwest 1/4, distant thereon
South 89(degrees) 53' 36" East 990.00 feet from the Northwest corner of said
Northwest 1/4; running thence South 0(degrees) 23' 45" West, parallel with the
West line of said Section 27, 2640 feet, more or less, to the South line of said
Northwest 1/4 of Section 27.
Excepting therefrom, that portion thereof lying Easterly of the following
described line:
Beginning at a point on the North line of said Northwest 1/4, distant thereon
North 89(degrees) 53' 36" West 476.80 feet from the Northeast corner of said
Northwest 1/4; running thence South 0(degrees) 25' 11" West 2642.78 feet to the
South line of said Northwest 1/4 of Section 27.
PARCEL TWO:
A right of way for road purposes, described as follows:
Beginning at a point on the North line of Section 27, Township 10 North, Range 2
East, M.D.B. & M., according to the official plat thereof, distant South 89
(degrees) 53' 36" East 990 feet from the Northwest corner of said Section 27;
running thence South 0(degrees) 23' 45" West, parallel with the West line of
said Section 27, 1300 feet; thence North 89(degrees) 53' 36" West 30 feet;
thence North 0(degrees) 23' 45" East 1300 feet to a point on the North line of
said Section 27; thence South 89(degrees) 53' 36" East 30 feet to the point of
beginning.
Street Address:
0000 Xxxx Xxxxxx Xxxxxx]
Xxxxxxxx, XX 00000.
Exhibit B
to Second Priority Deed of Trust
Premises Located in a
Special Flood Hazard Area
None.
Appendix A
to Second Priority Deed of Trust
Local Law Provisions.
Appendix B
to Second Priority Deed of Trust
Definitions Annex
